Islamic Finance

Malaysia’s Affin Bank not looking at M&As

| 19 June, 2017

Mon June 19, 2017 | 11:29am

Affin Bank Bhd is not looking to merge with other financial institutions even though it is under pressure from market speculation to form a larger banking group.

Affin Bank managing director and chief executive officer (CEO) Kamarul Ariffin Mohd Jamil said it was healthy to have banks of different sizes in the market.

“I think there is a place for a medium-sized bank in the market,” said Kamarul Ariffin, who is also group CEO of Affin Holdings Bhd, the bank’s parent company.

He said mergers and acquisitions (M&As) would only make sense if it added value to shareholders.

Earlier this month, RHB Bank Bhd and AMMB Holdings Bhd announced they had started merger talks, prompting speculation of other M&As in the banking sector.

Affin Bank and Alliance Bank Malaysia Bhd, among the smallest banks in the country, were said to be prime targets of M&As.

Affin Bank is controlled by the Armed Forces Fund Board while its second-largest shareholder is Hong Kong-listed Bank of East Asia Ltd.

Kamarul Ariffin said Affin Bank was targeting a loan growth of eight to 10 per cent this year, while its Islamic division was expected to grow 15 per cent.

“Broad-based growth comes from consumer, corporate and small and medium enterprises (SMEs) commercial divisions.”

Kamarul Ariffin said this year’s major contribution would be from the consumer sector, which was expected to contribute around 40 per cent, followed by SMEs and corporate segment with 30 per cent each.

Affin Bank has about 108 branches nationwide and expects to add more branches in areas that it is not represented.

“We are looking at opening five to six branches this year and next year. The initiative is in line with our move to embrace technology and digitalisation,” he said.

Affin Bank is undergoing a transformation programme to change the business model, the way it handles customers and internal processes.

 Copyright New Straits Times