According to the non-bank financial services provider, the OPR increase has had a particularly strong impact on lower income groups, specifically those earning RM1,500 or less, as well as younger customers aged 25 and below.
Aeon Credit chairman Ng Eng Kiat said: “Our customers are (mostly) individuals. Interest rate hikes and inflationary trends, all of these have an impact on disposable income”.
The group also announced that it plans to reduce its high-risk borrower group to around 20% of total borrowers from the current 30%.
Speaking at a press conference after the group’s 26th annual general meeting (AGM) today, managing director Daisuke Maeda said that Aeon Credit has come out with an artificial intelligence (AI) initiative to improve its asset quality.
The group has formed a collaboration with Japan-based Global Al Innovations Laboratory Co Ltd (Gailabo) to optimise its customer application process through an AI-based credit scoring system.
The new system will allow Aeon Credit to “optimise and enhance the application process to eligible applicants to improve approval ratio as well as adopt a risk-based collection approach which is focused on high-risk customers to improve collection performance”, explained Maeda.
The AI model will assess customers’ behaviour through their payment patterns, and allow Aeon Credit to focus on borrowers with a high risk of failing to pay their loans on time.
“The use of AI will increase (our) productivity. This does not mean that we will lay off our staff, instead we will reskill them for different segments of the company,” he added.
Aeon Credit also announced that it had approved a dividend of 21 sen per share for the financial year ended Feb 28, 2023 (FY2023), to be paid on July 20, 2023.
The group’s FY2023 net profit rose to RM417.69 million from RM365.42 million in the previous year.
Revenue increased 7.6% to RM1.64 billion from RM1.52 billion previously.
At market close today, Aeon Credit’s share price stood at RM11.36, up 10 sen or 0.89% for the day, giving the group a valuation of RM2.9 billion.