KUALA LUMPUR: Aeon Group’s Aeon Bank plans to break even within five years, leveraging its brand and market presence, according to Aeon Credit Service (M) Bhd.
Aeon Bank – Malaysia’s first Islamic digital bank – is one of five digital banking licence holders in the country. It operates under joint ownership by Aeon Financial Service Ltd and Aeon Credit, both subsidiaries of Aeon Group.
Aeon Credit CFO Lee Siew Tee said that since its launch on May 26, the bank has received encouraging and positive responses from depositors exceeding its expectations.
“We are unable to disclose the number of deposits taken, but it’s beyond our expectations. So we will continue to launch new products, subject to Bank Negara Malaysia’s approval,” she told a press conference after Aeon Credit’s AGM today.
Aeon Credit managing director Daisuke Maeda said Aeon Group’s presence through Aeon shopping malls and household brand recognition provides a competitive edge.
“We have a strong presence in the market, especially in Aeon shopping malls, well known in household brands in this country. And Aeon Credit also has a big customer base. So this is a good advantage for us to offer the more attractive financial products. And not only the financial products but also integrated with the customers’ daily life, the shopping, to offer the benefits.
“Now our digital bank is offering us 3,000 Aeon points when you open the bank accounts and also by spending the debit card, giving Aeon points. This is quite unique in that it integrated financial services as well as a shopping experience. So this is an advantage in the digital bank market,” he added.
Aeon Credit chairman Ng Eng Kiat acknowledged that the digital banking sector is highly competitive, with competition from four other digital banks in the market, including GX Bank which launched earlier.
“So, apart from launching products related to deposits on one side of the balance sheet, we also need to consider loans,” he said.
However, Ng said it is a gradual development, as it is ensuring robust cybersecurity infrastructure before launching new products for both sides of the balance sheet – deposit products and loan offerings.
“We have to be really careful. And like any business, there is always a gestation period. And for a bank, the gestation period is longer because you need to undergo proper due diligence before launching a product,” he added.
All resolutions listed and tabled at the group’s 27th AGM were approved by shareholders.
The proposed final single-tier dividend of 14 sen per share for the financial year ended Feb 29 2024 (FY24) which represents a total dividend payout of RM144.2 million or 34% of the group’s net profit was also approved by the shareholders.
For FY24, Aeon Credit’s revenue increased by 16.6% to RM1.91 billion from RM1.64 billion recorded a year ago.
This increase was due to higher transaction and financing volume, which grew by 16.9% to RM7.30 billion year-on-year. Consequently, profit before tax rose to RM565.17 million, while profit after tax recorded a new high of RM424.02 million.
Easy payment and personal financing remained the primary driver of revenue and profit growth for the group.
The total financing volume generated by this segment surged 18.9% to RM5.28 billion in FY24 compared to RM4,4 billion in FY23.
Maeda highlighted that it has made positive progress in its digital transformation journey.
“Last year, we introduced an instant approval scheme using credit information and a risk-based interest rate system based on customer scores. This allows us to present a credit limit to many customers within one minute. Additionally, customers with good scores will receive instant approval automatically.”
As a result, he said, it has captured the demand from customers, especially for its used cars financing solutions, significantly expanding the sales of used car loans to RM1.11 billion, an increase of 50% as compared to the previous year and we are keeping this sale momentum in this year.
Maeda said it will gradually upgrade Aeon Wallet to promote digitalisation and approach a wider range of segments,
“We will make the wallet as a common membership app for Aeon Group and enhance wallet payments and loyalty programmes. We will also provide various financial products through the app, aiming for further customer convenience. Additionally, Aeon Bank will be integrated into our ecosystem to provide comprehensive financial services,” he added.
