Affin Bank Bhd shares fell 1.35% on Monday as investors weighed concerns over asset quality and rising provisioning following the bank’s latest earnings and a series of cautious analyst calls.
As of 4.29pm, the stock was down 3 sen to RM2.20, from its previous close of RM2.23. It opened at RM2.24 and touched an intraday high of RM2.24 before easing to a low of RM2.20, with 3.24 million shares traded.
The decline came after Affin reported second-quarter net profit of RM127.5 million, down 5.9% quarter-on-quarter and 11.1% year-on-year. First-half core net profit fell 1.7% year-on-year to RM263 million, reaching only 45% to 47% of analysts’ full-year forecasts.
Analysts have turned more cautious on the stock as higher provisions and weaker contributions from associates weighed on earnings. MBSB Investment Bank maintained a NEUTRAL call while cutting its target price to RM2.28 from RM2.39, while Hong Leong Investment Bank retained its HOLD call and lowered its target to RM2.30 from RM2.39.
CIMB Securities also downgraded Affin to HOLD from BUY and reduced its target price to RM2.30 from RM2.82, citing increased credit costs and provisioning risks.
Affin’s gross impaired loan ratio rose to 1.82% from 1.75%, while provisions more than tripled year-on-year. CIMB said the bank had also raised its FY26 net credit charge guidance to 35 to 36 basis points from 13 basis points previously.
Despite the earnings pressure, the bank’s underlying operations remained resilient. Net income increased 12.2% year-on-year to RM1.30 billion in the first half, while operating profit before allowances rose 33.5% to RM481.9 million.
Gross loans, advances and financing also expanded 13.6% year-on-year to RM84.1 billion, while customer deposits grew 3% to RM81.1 billion.
The bank has also strengthened its capital position, having issued an additional RM400 million in AT1CS in July, which improved its total capital ratio by 40 basis points.
Analysts nevertheless said clearer signs of stabilising asset quality and provisions would be needed before investor sentiment towards Affin improves.
