Affin astir over expansion plans

 

AFFIN Bank Bhd is set to grow its profits again this year as it prepares to expand in Indonesia, its chief said.

The lender, Malaysia's second smallest, aims to grow its net profit by as much as a quarter this year, helped by an expansion in loans.

Affin Bank made a pre-tax profit of RM322 million for the year to December 31 2007, making up 91 per cent of Affin Holdings Bhd's pre-tax profit.

"There is (loan) growth, but we control growth and make sure there is quality," chief executive Datuk Seri Abdul Hamidy Hafiz told Business Times in an interview.

The bank will focus on corporate and retail loans although Hamidy refuses to be pigeonholed into certain segments.

Affin Bank also likes to do loans that are not seen on its loan books like letters of credit and bank guarantees.

"They use very little of my capital and they boost my fee income," he said. Still, it will continue to give out loans for houses and cars and even credit cards.

According to Affin Holdings' 2007 annual report, the biggest chunk or 37 per cent of its RM19 billion gross loans are for hire purchases.

"My focus is on risk. I do not subscribe to this market thinking that we go corporate, we go retail. No. Anything that is good risk I take," Hamidy stressed.

Affin Bank will also lower its bad loans further this year, to below five per cent from 6.7 per cent currently.

Currently, Hamidy is excited about expanding abroad. His main focus is Indonesia where there is a lot of room for banks to grow.

"We are seriously looking at Indonesia. Many people (have) approached us. We know what we want," he said.

The lender has capped the amount it will spend for a takeover at around RM400 million. It wants a bank that is present in Jakarta with around 10 branches.

Affin Bank is also not too concerned about the size of its takeover target.

"If we buy a size that we can live with, what are the advantages? We know it faster, we develop it. Then we can culture it our way," Hamidy said.