KUALA LUMPUR: Affin Bank Bhd is expecting more hikes in the overnight policy rate (OPR) this year until the market goes back to normalcy and inflationary issues rectified.
Affin president and group chief executive officer, Datuk Wan Razly Abdullah Wan Ali said the world is going through a period of high commodity prices, high energy cost and high inflation rate.
"We are experiencing inflation right now driven by high commodity prices and high energy cost, so Bank Negara Malaysia (BNM) has to take action to normalise the situation.
"So, we expect to see a few more hikes to happen this year and we anticipate an increase of 50 basis points (bps). At present, 25 bps has been raised so potentially another 25 bps to come," he said during a press conference here today.
On May 11, 2022, BNM increased the OPR by 25 basis points to 2.00 per cent in its third Monetary Policy Committee meeting this year.
Meanwhile, Wan Razly said the ringgit should normalise once the central bank implements its plan to address the inflation rate.
"That will happen in due course as the ringgit's performance is determined on exports, imports, and the business opportunities in the country," he said.
Wan Razly noted that Affin Bank is expecting its loan growth to taper off because people often borrow less to minimise their costs with the anticipation of OPR hikes.
"We had good loan growth for the first quarter of this year. Our loan growth target for this year is at 12 per cent, compared to 11 per cent last year," he added.
Wan Razly said the bank is always looking for ways to optimise its net interest margin (NIM), particularly through current account and savings account (CASA).
"The more CASA we get, the more we can optimise. We do have a sizable portfolio of the bank which is floating rate but that portfolio will also rise with our cost of deposits.
"There is some room there but the more low cost findings we can get, the better it is for the bank," he said.
Meanwhile, Affin Bank has officially launched a collaboration with GAX MD Sdn Bhd (MYTHEO), a robo-advisor platform offering an algorithm and automated discretionary investment portfolio management services powered by artificial intelligence (AI) technology.
Wan Razly said the partnership, which is its first collaboration with a robo-advisor, offers alternative investment to its new and existing Affin Avance customers, enhancing the line-up of financial offerings and products.
"This collaboration to provide a robo-advisory service for our customers bodes well with their evolving needs, rapid technological advancement and shifting market dynamics," he said.