In keeping up with other major banks, Affin Bank launched its Internet-based retail banking facility, affinOnline.com last December. The online portal enables customers to do a variety of transactions without having to go to the bank.
The introduction of affinOnline.com was an evolution of services that the bank offers its customers, its then CEO and MD Datuk Seri Abdul Hamidy Abdul Hafiz said in a press release last year.

To further address customers’ needs, the bank also installed Internet kiosks at its branches to allow people with no access to the Internet to do banking in its self-service lobbies.

Despite the economic slowdown last year, for FY2008 ended Dec 31, Affin Holdings Bhd posted a 16.3% increase in net profit to RM292.7 million, compared with the previous year.

Analysts say that although smaller banks like Affin are on a better footing to weather the financial storm this time round, they are still more vulnerable to the economic slowdown than their well-capitalised counterparts which have larger customer networks and stronger capability to capture business. Affin is Malaysia’s second smallest bank.

The Affin group saw its net non-performing loans (NPL) ratio rise to 3.38% from 3.2% in the first quarter of this year but its results for the half-year ended June 30 showed net profit of RM181.4 million, an increase of 17.3% compared with RM154.7 million in 1H2008.

This year, the bank is focused on meeting the needs of consumers hit by the downturn. In February, it announced that it was maintaining its credit card charge, set in August 2007, at 9.99% per annum — the lowest in the country.

In a Feb 17 report in The Edge Financial Daily, Abdul Hamidy said the bank remains committed to lowering financing costs for its customers during the downturn.

Affin Bank’s credit card interest rate does not differentiate between different tiers of cardholders; however, cardholders must meet the minimum payment required by the due date to enjoy the 9.99% interest rate.

Last month, Affin Bank launched AffinGOLD and its shariah-compliant equivalent AffinGold-I, a savings account that allows senior citizens to earn high interest rates of up to 2.5% annually from a minimum savings amount of only RM5,000.

“Generally, senior citizens look for good returns in financial products. AffinGOLD is specially created with these customers in mind. With AffinGOLD, it will further enhance the bank’s target of achieving higher growth in retail deposits over the next one year,” said Idris Abd Hamid, Affin Bank director for consumer banking, in an Oct 19 press release.

CIMB Research in a Nov 3 report said it was encouraged by Affin’s financial performance in the last two to three quarters, which it attributed to a revamp of the group’s operations. 

Affin Bank has been undergoing a revamp since a rebranding exercise in 2005. The initiative followed the introduction of a new business model in 2003 to improve profitability and transform itself into a “medium-sized bank of prominence”.

The bank’s new MD and CEO, Zulkiflee Abbas Abdul Hamid, who was appointed on April 1 this year, is focusing on the bank’s five-year target, which begins next year, to reach the levels of its biggest peers in terms of profit and profitability.

CIMB Research noted at the beginning of the month that it was positive on Affin’s aggressive target of 20% return on equity (ROE) and lower NPL ratios. The group’s net NPL ratio declined to 2.96% as at end-June 2009 from 3.3% at end-2008.

In a Nov 3 report in a local daily, Zulkiflee said the bank aims to be among the top five lenders in key ratios like ROE, cost-income and NPLs rather than asset size.




This article appeared in Malaysia's Most Valuable Brands 2009, the special focus pullout of The Edge Malaysia, Issue 782, Nov 23-29, 2009.