CEO Morning Brief

Aeon Credit Says It Will Focus on Asset Quality, Digitalisation for Sustained Earnings Growth

Publish date: Fri, 21 Jun 2024, 10:23 AM
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TheEdge CEO Morning Brief
From left: Aeon Credit Service (M) Bhd managing director Daisuke Maeda, chairman Ng Eng Kiat and chief financial officer Lee Siew Tee at a press conference after the group's annual general meeting on Thursday. (Photo by Shahrin Yahya/The Edge)

KUALA LUMPUR (June 20): Aeon Credit Service (M) Bhd (KL:AEONCR) wants to enhance its asset quality while expanding its business reach to higher income segments to position itself for sustained earnings growth.

Aeon Credit plans to digitise its onboarding process, allowing it to serve a wider range of customers, and further leverage artificial intelligence (AI) credit scoring and risk-based collection strategies to improve its asset quality.

Chief financial officer Lee Siew Tee told a press conference after the group's annual general meeting on Thursday that Aeon Credit has "strategically planned its approach to growing the middle income segment, particularly for used cars and credit cards".

For its financial year ended Feb 29, 2024 (FY2024), Aeon Credit managed to expand its used car loans by RM1.11 billion, up 50% from FY2023, and aims to "keep this momentum this year (FY2025)".

"We will make the Aeon Wallet a common membership app for Aeon Group and enhance wallet payments and loyalty programmes. We will also provide various financial products through the apps, aiming for further customer convenience," the group added.

In FY2024, Aeon Credit's net profit rose 1.5% to a record high of RM424.02 million from RM417.69 million in FY2023, as revenue grew 16.6% to RM1.91 billion from RM1.64 billion on higher transactions and financing volume — up 16.9% to RM7.3 billion.

Moving ahead, Aeon Credit chairman Ng Eng Kiat flagged that the group may face uncertainties related to geopolitical tensions and potential interest rate increases.

Aeon Bank to break even in five years

On the group's newly launched Aeon Bank — Malaysia’s first Islamic digital bank — Aeon Credit managing director Daisuke Maeda is expecting the digital bank to reach its breakeven point within five years.

Despite rising competition from other digital banks, Aeon Bank’s promotion campaign has received positive responses from the market, he noted. Other digital banks in Malaysia include GXBank and Boost Bank.

“We have a big customer base [and] this is a good advantage for us. [We] offer more attractive financial products that not only integrate with our customers, but also offer various benefits for our customers,” Maeda added.

Aeon Bank, launched on May 26, is jointly owned by Aeon Financial Service Ltd and Aeon Credit, both subsidiaries of Japan's largest retail group — Aeon Group.

Source: TheEdge - 21 Jun 2024

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