KUALA LUMPUR (Feb 25): Affin Bank Bhd’s (KL:AFFIN) net profit for the fourth quarter jumped by more than three times on write-back of credit impairments losses. To reward its shareholders, the bank has proposed a bonus issue of one new share for every 18 shares held.

Net profit for the three months ended Dec 31, 2024 (4QFY2024) rose to RM135.09 million from RM39.54 million a year ago, according to the bank's exchange filing. The increase was driven by a write-back of credit impairment losses of RM81.58 million, compared to an allowance for credit impairment losses of RM11.11 million in 4QFY2023.

Net interest income increased 27.3% year-on-year to RM225.74 million while non-interest income was 26.4% higher at RM78.65 million.

No dividend was declared for the quarter, which means the bank is not paying any dividend for FY2024. In comparison, a dividend of 5.76 sen per share was paid for FY2023.

For FY2025, Affin Bank said it is targeting RM1.1 billion in profit before tax and a return on equity of 6%. Net interest margin, a measure of profitability from lending, could come in at 1.55% for the year while cost-to-income ratio could fall to 65%, the bank said.

For FY2024, full-year net profit was up 26.7% to RM509.7 million from RM402.19 million in FY2023, while net interest income rose 5.6% to RM826.41 million, underpinned by higher loans disbursed which grew 8.1% to RM72 billion.

Full-year non-interest income was up 7.4% to RM652.2 million, thanks to higher net fees income and gains on financial instruments.

The bank registered a write-back of credit impairment losses of RM170.18 million for the year, against an allowance for credit impairment losses of RM75.01 million in FY2023.

Profit before tax was RM701.03 million, below RM1 billion guided while net interest margin narrowed to 1.45% and below the bank's own target of 1.60%. Cost-to-income ratio was higher at 76.88% versus 71.57% a year ago.

In terms of asset quality, gross impaired loan was a tad higher at 1.94% versus 1.90% in FY2023, while loan loss coverage was 83.65%.

Datuk Wan Razly Abdullah, the bank's president and group chief executive officer, said the bank is progressing in its digital transformation journey with the upcoming launch of its new Digital Core and Mobile App in 1QFY2025.

“We are strengthening Affin’s resilience and growth by expanding our loan portfolio, reinforcing our asset base, and driving sustainable profitability,” he added.

Shares of Affin Bank ended Tuesday two sen or 0.7% lower at RM2.77 on Tuesday, valuing the bank at RM6.65 billion. Year-to-date, the stock has fallen 4.8%.