|
On behalf of the Board of Directors of AFFINBANK,
we are pleased to present our Annual Report
and Financial Statements for the year ended
31 December 2007.
IN WITH THE NEW, OUT WITH THE OLD
Just like everything and everywhere else, change is upon us and a new tomorrow beckons. The Malaysian
economy is not insulated by the changes that are prevalent in every facet of the worldwide economic market,
which we are increasingly exposed to and engaged at. The Gross Domestic Product grew 5%, buoyed by the
strengthened Ringgit against the Dollar, increased consumer spending patterns and generally, strong fundamentals.
However, a looming US slowdown and possible recession amidst a backdrop of continued upswing of both oil
and gold prices worldwide seems to be the contributing factor to a skeptical investment oriented trend.
This past year was rather challenging with the threat of inflation, the changing trends in retail consumerism and
perceived fears of monetary market instability. AFFINBANK continued to stay its course of modernization and
corporate repositioning to adapt to the changing times. We are happy to record that the Bank has performed
well beyond expectations and is moving in tandem with market growth and liberalization. Last year witnessed the
group taking giant strides at transformation and outlook enhancement.
HOW WE FARED FINANCIALLY
As a group, AFFINBANK recorded a pre-tax profi t of RM322.00 million for
the fi nancial year ended 31 December 2007, an increase of 18.25% from
RM272.31 million in 2006. At the Bank level, the Bank posted an increase
of 14.99% in pre-tax profit to RM251.21 million in 2007, from RM218.46
million in 2006.
During the year, total assets at the Bank’s level increased by RM52.54 million
to RM26.23 billion as at year-end 2007. It however recorded a slight
decrease in its loans and advances to RM15.10 billion.
The Bank's total deposits registered a marginal increase of RM19.78 billion
in 2007 against RM19.77 billion recorded the previous corresponding period.
Growth was also recorded in net interest income, which rose by 5.98% to
RM634.74 million from RM598.91 million recorded the previous year.
The Bank succeeded in lowering its non-performing loans further to 8.38%,
from 12.43% in 2006. Overhead expenses rose by 16.58% to RM461.97 million,
compared to RM396.26 million in 2006. The increase was attributed to IT
development cost and personnel cost.
WHAT WE'VE BEEN UP TO
MEGA which translates to Modern, Efficient, Growth and Aggressive allowed the group to re-strategize and
focus on its physical attributes, internal and personal operation ability. We are glad to report that we have, as a
group, cut down on red tape and bureaucracy, reengineered our processes, restructured our physical presence
and reached out to the pertinent target market that is relevant to our success and corporate wellbeing. It was a
watershed year that transformed an older Malaysian entity to a renewed corporate responsible company.
There were important milestones that have become
watershed projects that have paved the way forward in
forging a dedicated and unifying spirit among AFFINBANK
colleagues, among others being the Affin Group Client
Appreciation Night. This commemoration and collaboration
night also saw the emergence and formation of the Affin
Banking Group, comprising AFFINBANK, AFFINISLAMIC
and AFFININVESTMENTBANK. This strategic move
resulted in a stronger, flexible and adept structure, one
that is poised and confident to enter the new financial
arena.
It was indeed an honour for the Bank to be reappointed
as the Chairman Bank of the Association of Banks in
Malaysia for the third consecutive term. The appointment
has certainly been an encouragement especially when
peers recognized the success and strides a medium-sized
bank has made in the industry.
Among the notable and more prominent partnerships
AFFINBANK has cemented was one with IBM aimed
at enhancing IT processes and the IT infrastructure
management services, through which the Bank was
able to better position itself to deliver world-class
practices, bringing enhanced banking experience
to its increasingly sophisticated and demanding
customers.
The Bank also rolled out Branch Channel Organizing
for Growth, the much required conceptual alignment
that streamlined sales and service procedures and
standards among branches nationwide. This important
exercise typified the corporate nature of the Bank,
acting, speaking and working as one corporate entity.
" AFFINBANK is the first
to reduce its credit card
finance charge to a
single digit. "
Coupled with this development, AFFINBANK introduced voucher-less banking, thus breaking into the new era of
the digital divide, enabling the customer to bank with us, minus the hassles of paper bureaucracy.
Along similar brand enhancement initiatives, AFFINBANK became the first to reduce its credit card finance charge
to a single digit, offering 9.99% annual interest compared with 18% offered by most card issuing banks. This latest
offering rewards deserving and loyal customers as we heed Bank Negara's move in giving incentive to credit card
users to manage their debts properly by reducing the finance charge to a reasonable level.
The Bank reached a landmark achievement when it was voted one of 30 most valuable brands in Malaysia by the
Association of Accredited Advertising Agencies (4As) in collaboration with INTERBRAND alongside some of the
prominent corporate brands in the country. The Bank in its pursuit of sustainable business growth was mindful
about its role in society and fulfilled its obligations as a caring bank by embarking on several Corporate Social
Responsibility initiatives through zakat payment distribution for the less privileged in Malaysian society.
On the international front, Affin Holdings announced that it was in
strategic partnership with the Bank of East Asia (BEA) to prepare
the Bank to spread its wings regionally. The tie-up will enhance
collaborative efforts between the two groups in the sharing and
exchange of knowledge and expertise. In addition, it presents an
opportunity for AFFINBANK to explore Islamic banking potentials
in China.
Year 2007 also added another feather to our cap as we successfully
deployed Basel II ahead of schedule, as determined by Bank Negara
and emerged as the leading Bank to do so. The completion of Basel
II requirement in advance gave us a parallel opportunity to focus on our
business goals in 2008 that is to offer Banking Without Barriers™
to customers. Also,the Bank has been able to integrate its risk
management procedures which were previously separated from
the business lines.
WHAT'S NEXT?
Looking ahead, our key objectives are to derive strategic synergy through integration, consolidation and
convergence of the three financial arms that makes up Affin Banking Group. In this effort, we will synergize the
strength of the divisions and subsidiaries to reflect a cohesive, integrated branding platform to suit the growing
market sophistication.
The Bank will strive for sustainable growth going forward and will continue taking prudent approaches to manage its
cost, improve operational effi ciency and to further strengthen its risk management in anticipation of its expanded
networking. Wearing a new brand needs relevant corporate adjustments and the Bank is now engineered to
move in one strategic direction with focus and dedication.
WORKING AS A FAMILY
The market is large and there is room for
everyone. Big or small clients alike are valuable
to our growth and existence. We see our
competition as both peers and partners. Our
team at the newly branded Affin Banking Group
is ready to meet the challenges of the year.
There will be no off-the-shelf, carte blanche
approach to meeting these challenges. Each
task demands a personal touch.
That is why we place our utmost value and
trust on the team we have built. Everyone
is equally important. We would not have
reached this level of achievement and success
without the dedication and enthusiasm of
each and every team member.
Affin Banking Group stands at the doorway to
a new horizon. We are renewed and ready to
face the challenges in tandem with the shift
in fi nancial landscape amidst a volatile market
outlook. It is a journey we take with our
partners, clients, friends and team members.
We believe it is a journey that will lead to
greater success and well deserved recognition.
A NOTE OF THANKS
Our continued strength is attributed to the support
of our customers, business partners and shareholders.
We also wish to extend our appreciation to our management
team and employees for their passion, dedication, hard
work and vision.
Our thanks also go to Bank Negara Malaysia, the Ministry
of Finance, Government agencies and regulatory authorities
for their invaluable assistance.
YBHG. GEN TAN SRI DATO' SERI ISMAIL HJ. OMAR (RTD)
Chairman
YBHG. DATO' SRI ABDUL HAMIDY ABDUL HAFIZ
Managing Director / CEO
|
