Affin Holdings aims high

PETALING JAYA: Affin Holdings Bhd, which plans to increase its SME loans portfolio, is looking to achieve a higher overall loan growth of 9% to 10% this year.
"We think we can achieve 9% to 10% growth this year, and for the first quarter, we already achieved an annualised loan growth of more than 9%," CEO Datuk Zulkiflee Abbas told a press conference after the company's AGM and EGM here yesterday.
He said over the last five years, the company had recorded a compound annual growth rate (CAGR) of 15%, except last year which was 8% growth. Zulkiflee, however, stressed that asset quality and impairment are always on improving trend.
Affin will grow its SME loans to 10% of its total asset portfolio this year from 8% currently as better growth is expected for this segment.
"In view of the current condition, we see a lot more opportunity in the SME segment while generating a greater margin," said Zulkiflee, adding that the SME loans segment is expected to grow more than 10% of the total asset portfolio in the next few years.
Corporate and consumers loans make up 46% of total asset portfolio, respectively, but margins are competitive in these segments, particularly mortgages, as a result of responsible lending guidelines.
Commenting on net interest margin, he noted that the market is still very competitive and is expected to reduce 10 basis points to 2.5% from 2.6% last year.
Meanwhile, deputy chairman Tan Sri Lodin Wok Kamaruddin said Affin, which agreed to buy Hwang-DBS (Malaysia) Bhd's core businesses, now known as Hwang Capital (M) Bhd, for RM1.36 billion, is always looking to expand its business, either through organic growth or mergers and acquisitions.
"For mergers and acquisitions, the possibility is to expand within the Asean region, but it is not something (which) happens so frequently," he said.
Affin is currently in early talks to acquire as much as a 24% stake in Bank Panin Syariah in Indonesia, after a plan to buy PT Ina Perdana was called-off in 2012, due to the restrictions imposed by the Indonesian authorities to cap the foreign shareholding to 40%.
Bank Panin Syariah is 51% owned by PT Bank Pan Indonesia, the seventh-largest bank in the country and listed on the Indonesian Stock Exchange in January.
Besides that, Affin also continues to look at setting up an Islamic banking operation in China by leveraging on its substantial shareholder The Bank of East Asia's footprint there.
"China has a lot of Muslims, especially in the northwest of the country, but we're still working on the plan, it might be longer due to constraints by local authoriities," Lodin added.
Affin received shareholders' approval yesterday on its right issue exercise to raise up to RM1.25 billion, most of which will be used to fund the acquisition of Hwang-DBS Malaysia core businesses, while RM200 million will be for Affin Bank.
When asked whether there will be more fund raising exercises, Lodin said the company is in a good capital position to fulfill the requirements under Basel III, and therefore, is not in a rush to raise more capital, unless for business requirements.
On its cooperation with Japan-based Daiwa Securities which started last December, Affin Investment Bank managing director Maimoonah Hussain said it has so far attracted RM100 million sales into Malaysia, but has not kick started the outflow business.
The cooperation will see Affin distributing its research reports to Daiwa Securities group's global client base and vice versa, on a co-branded basis.