Affin still keen on Hwang-DBS despite lower profit

Affin still keen on Hwang-DBS despite lower profit
Business & Markets 2013
Written by Madiha Fuad of theedgemalaysia.com
Tuesday, 20 August 2013 11:32

KUALA LUMPUR: Financial services entity AFFIN HOLDINGS BHD [] is still keen to acquire the units of Hwang- DBS (M) Bhd although the latter posted lower profit in the third quarter ended April 30 (3Q).

"When we looked at Hwang-DBS, we looked at it through a business aspect," said Maimoonah Hussain, managing director of Affin Investment Bank Bhd, after the announcement of Affin's financial results here yesterday.

Hwang-DBS posted net profit of RM11.4 million for 3Q compared with RM18.3 million in the previous corresponding period.

"It is only the results of one quarter but we are looking at the entire financial year's performance," she added.

Maimoonah said the group is keen to proceed with the acquisition of Hwang-DBS' stock broking and investment bank, as well as its fund management business.

On recent reports that Hwang- DBS was not satisfied with the pricing of the bid, Affin Holdings chairman Tan Sri Mohd Zahidi Zainuddin said the group had submitted a bid which was fair and reasonable and would wait for the outcome.

Affin and AMMB HOLDINGS BHD [] had obtained Bank Negara Malaysia's (BNM) approval in April to enter into negotiations with Hwang-DBS to acquire and merge the businesses of the financial services group.

The bid was submitted in July and a decision is expected soon.

Aside from local acquisitions, Affin Islamic Bank CEO Kamarul Ariffin said the group was still keen on expanding its business to Indonesia, noting that it had pulled back from a previous acquisition due to regulations on ownership, which limit the group to a maximum 40% stake.

"If we find a solution or means for us to progress our expansion to Indonesia, I think we will be looking at the market again as it is one of the largest growing markets in the region," he said.

On BNM's lending curbs which pulled the brakes on pre-approved housing loans, Datuk Zulkiflee Abbas Abdul Hamid, managing director and CEO of Affin Bank Bhd, was of the view that the group would see minimal impact.

On its outlook, Zahidi expects the group to sustain positive earnings growth for the remaining quarters of the current financial year ending Dec 31 (FY13).

Affin posted net profit of RM159.3 million for 2QFY13, a 13.1% increase from RM140.8 million a year earlier.

Revenue also increased to RM757.1 million compared with RM729.9 million previously.

For the first six months until June 30, 2013, the group recorded a profit before tax of RM422.4 million compared with RM409.4 million in the same period last year.



This article first appeared in The Edge Financial Daily, on August 20, 2013.