Higher taxes drag down Affin Bank’s 4Q net profit; declares 7.77 sen dividend

KUALA LUMPUR (Feb 27): Affin Bank Bhd’s net profit shrank by a third to RM138.26 million for the fourth quarter ended Dec 31, 2022 (4QFY2022) due to a sharp rise in taxation to RM86.69 million versus RM3.45 million a year ago.

The bank made a net profit of RM206.85 million in the prior year's corresponding quarter.

Quarterly revenue also slipped marginally to RM566.7 million from RM572.1 million in 4QFY2021. Earnings per share contracted to 6.37 sen from 9.79 sen previously.

Despite lower earnings, the bank has declared a final dividend of 7.77 sen per share, amounting to RM176.7 million. This brings the bank's total dividend for the full financial year ended Dec 31, 2022 (FY2022) to 30.39 sen per share, including a special dividend of 22.62 sen per share, representing a total dividend payout of RM677 million.

Its profit before tax, in contrast, grew 22.4% to RM225.4 million in 4QFY2022 versus RM184 million in 4QFY2021, boosted by higher net interest income and income from the Islamic banking business as well as increase in non-interest income.

“Net interest income for the quarter under review increased by RM27.1 million as compared to the same quarter last year or 11.3% to RM240.3 million.

“Net fee and commission income of the group was RM62.5 million, an increase of RM3.8 million or 6.6% from RM58.7 million in the previous corresponding year. [The] group also recorded higher gains on financial instruments of RM24.2 million.

“Other operating expenses were 17.5% higher as compared to the same quarter last year due to higher general and administrative expenses and personnel costs respectively,” it said.

Affin Bank’s annual net profit for FY2022 more than doubled to RM1.3 billion compared to RM526.93 million the prior year as annual revenue expanded 47% to RM3.3 billion from RM2.24 billion, contributed by the gains from its divestment of Affin Hwang Asset Management Bhd.

The bank said it has announced the next phase of its transformation journey with the A25 Plan which will run from 2023 to 2025.

The A25 Plan, it said, will see a continued focus on growing the community banking, enterprise banking and Islamic banking businesses, with new strategies for its corporate banking, treasury and investment business, where the growth aspirations of the various businesses which will be supported by the increase in synergistic cooperation within the group.

“Despite the challenges faced by the banking industry, the group’s strong focus on customer service and innovation, as well as its enhanced and effective risk management practices, will help it to continue to grow and improve the services offered to its customers,” it added.

At the closing bell on Monday, shares of Affin Bank were two sen or 0.98% higher at RM2.07, with a market value of RM4.71 billion.