Its revenue, meanwhile, dropped 69% y-o-y to RM500.44 million from RM1.62 billion in the same quarter a year earlier.

In a press statement today, Affin said that it had realised a gain of RM1.06 billion from the divestment of its asset management business in 2022.

However, it added that its profit had been impacted by net interest margin (NIM) compression from the elevated cost of funds.

President and group CEO Wan Razly Abdullah highlighted the obstacles faced by the banking group amid the higher-for-longer interest rate environment globally.

“This year has been a challenging year with margin compression due to elevated cost of funds led by the US Federal Reserve. Globally, all banks are experiencing increased deposit cost.

“Capital markets are beginning to price in an inverted yield curve, with the expectation of a pause in monetary policy, leading to an aggressive cut in Federal Reserve interest rates for 2024,” said Wan Razly.

For the nine-month period ended Sept 30, 2023 (9M FY2023), Affin’s net profit declined 69% y-o-y to RM362.66 million from RM1.16 billion while revenue dropped 45% y-o-y to RM1.5 billion from RM2.73 billion previously.

The group’s net interest income (NII) for 9M FY2023 was recorded at RM605.6 million, dropping 20% y-o-y owing to the NIM compression.

Non-interest income rose 96% y-o-y to RM449.6 million, excluding the sales proceeds from the disposal of its asset management business.

As at 4.36pm, Affin’s share price was down 4 sen or 1.94% at RM2.02, giving it a market capitalisation of RM4.74 billion.