Affin Bank profit seen lower in H2 on policy rate cut

Its net profit rose 17% in H1 on its interest and non-interest incomes expanding.

Affin Bank Berhad is expected to log a lower net profit in the second half of 2025, weighed by the lowering of the overnight policy rate (OPR) of Bank Negara Malaysia (BNM), according to a report by CGS International.

The Malaysian bank’s net profit is expected to come at MYR245.6m for the period, representing an 8.2% decline from the profit in H1 2025, and a 12.6% drop from the net profit in H2 2024.

Affin Bank’s H1 2025 net profit rose 17%, underpinned by its net interest income and non-interest income expanding during the period.

The central bank enacted a 25-basis point (bp) cut in the OPR on 9 July.

“We believe the drag on [H2 2025] net profit would come from the time lag between the downward repricing of loans and fixed deposits (FDs) and the 25bp cut in overnight policy rate (OPR) by Bank Negara Malaysia (BNM) on 9 July,” said Winson Ng, analyst, CGS International.

Taking into account the OPR cut, FY2025 net profit is lower by 2.9% from CGS International’s initial estimates. However, it lifts FY2026-27 net profit estimates by circa 3% each.

Higher net profit estimates for the next fiscal year is driven by solid net interest income growth, and above-industry loan growth. Affin Bank’s loan growth is expected to be 8.1% for the fiscal year of 2025, compared to around 5% of the banking industry.

Potential downside risks for Affin Bank are material deterioration of loan growth and asset quality.