CIMB Investment Bank Bhd (CIMB Securities) said Affin Bank Bhd remains a BUY with a slightly lower target price of RM2.82 as analysts viewed the lender’s move into private equity and alternative financing as complementary to its wholesale banking transition rather than a core earnings driver.
The research house said a recent media article highlighted Affin’s plan to diversify into private equity, crypto financing and private credit, describing the strategy as unconventional and high risk. However, analysts said these initiatives should be viewed in context of the bank’s broader shift towards a more fee-based wholesale banking model.
CIMB noted that the proposed private equity venture is still in its early stages with an initial capital commitment of about RM10 million, which is considered immaterial in scale. Analysts added that while the platform could broaden Affin’s corporate advisory and investment banking capabilities, execution remains the key risk given structural differences from traditional banking.
On crypto-financing, CIMB said the initiative is targeted at high-net-worth and sophisticated investors, following Affin’s partnership with Halogen Capital to distribute regulated Bitcoin funds. The research house said exposure is expected to remain contained due to its limited scope and risk controls.
Private credit initiatives were also described as preliminary, with analysts saying it is too early to assess financial impact until clearer details emerge on structure, risk appetite and capital deployment.
CIMB said near-term focus remains on core structural drivers including scaling Affin-Pheim Asset Management and migrating to its Möbius digital banking platform, which are expected to support wealth income growth and operational efficiency.
The research house added that Affin’s AX28 targets remain ambitious, with profit before tax goals requiring a significant earnings acceleration. Analysts said execution risks around digital transformation and new ventures may lead to recalibration of some targets.
As of 12.08 pm, the stock price is flat at RM2.23.
