Affin confident revamp will lead to better profitability

KUALA LUMPUR: Affin Holdings Bhd, which has received shareholders’ approval for its corporate exercise that will culminate in the transfer of listing status from Affin Holdings to Affin Bank Bhd, expects the bank’s capital position to be enhanced post restructuring, with the capability to offer a wider range of services to customers.
It is confident that this will eventually lead to better profitability and enable it to emerge as a stronger universal banking group.
Group CEO Kamarul Ariffin Mohd Jamil said the bank’s positioning will also be enhanced as it now has the full assets of the various entities, giving it the “size” and direct access to the capital and equity markets, which profiles the group into a much stronger entity.
“Through this, we believe that we will be a much stronger force to be reckoned with in the future. The outcome will eventually be better performance, better customer service and better approach to market, with more comprehensive offerings to customers, which eventually lead to better profitability,” he told a press conference after its EGM here today.
Affin Hwang Investment Bank Bhd group managing director Datuk Maimoonah Hussain said over a longer term, it can provide comprehensive services under one roof to customers, with the natural assumption that its business and profitability will get better.
“The capital of the commercial bank and consolidated group will improve and that implies the ability to provide higher business and bigger loans,” she said.
The corporate exercise entails a distribution-in-specie by Affin Holdings of its entire shareholding in Affin Bank whereby entitled shareholders of Affin Holdings will receive one Affin Bank share for each Affin Holdings share held by them.
Affin Holdings has transferred its entire shareholding in Affin Hwang Investment Bank, Affin Moneybrokers Sdn Bhd, AXA Affin Life Insurance Bhd and AXA Affin General Insurance Bhd to Affin Bank. Affin Bank is now the intermediate holding company for the companies pending the completion of the corporate exercise in the first half of 2018.
The reorganisation will simplify the shareholding structure of Affin group as well as reduce the layers of the corporate structure. It is optimistic that the execise will be able to unlock more value for shareholders and provide better returns in the future.
On board representation, chairman Gen Tan Sri Mohd Zahidi Zainuddin (R) said in its aim to be lean, there will be eight board members, compared with nine previously. Its existing board members will be reshuffled within the group. This has been presented to the central bank for approval.
Kamarul Ariffin said Affin wants to be a more diversified group with stronger income, not just loan-based but also fee-based. It is moving towards the retail segment, compared with being more corporate-centric previously.
He said the group does not foresee any voluntary separation scheme (VSS) arising from the corporate exercise but it will undertake an “organisational renewal” if there is such a need.
Affin had earlier in the year embarked on a VSS to trim its workforce by 6% or about 300 employees.
Kamarul said it has not carried out a VSS for the past nine years.
“We find that it (VSS) is opportune in line with our restructuring exercise, our Affinity transformation programme for some staff who feel that they aren’t able to fit in. It’s voluntary, there is no coercion, no compulsion when we undertake this (VSS) exercise,” Kamarul Ariffin explained.
Maimoonah said the group’s transformation entails strong expectations and demands on staff to keep up with its pace and that the VSS provides staff who are feeling exhausted or those who think they may not be a right fit anymore the opportunity to exit the organisation.