Affin Bank Bhd faces a challenging near-term earnings outlook as elevated credit costs and a structurally high cost base continue to weigh on profitability, according to analysis from Hong Leong Investment Bank Bhd (HLIB).
The lender’s financial performance is expected to remain under pressure until these fundamental headwinds ease.
The broker’s assessment highlights two persistent drag factors for the Malaysian lender.
First, rising credit costs suggest that asset quality concerns are translating into higher provisions, directly impacting net income.
Second, the bank’s cost structure remains inefficient relative to peers, limiting its ability to offset revenue pressures through expense discipline.
This cautionary stance from HLIB underscores broader challenges within the Malaysian banking sector, where many institutions are navigating a delicate balance between loan growth and risk management.