Affin Bank sinks to 8-month low after Q2 profit disappoints

Affin Bank Bhd's shares plummeted to a 8-month low on poor Q2 profit results. The Malaysian bank saw an 11% decline in second quarter net profit, attributed to a sharp rise in bad debt provisions. Net profit for Q2 FY2026 was RM127.52 million, down from RM143.49 million in the previous year. For the first half of FY2026, net profit fell nearly 2% compared to 2025.

Affin's shares dropped as much as 3 sen or 1.3% to RM2.20, its lowest level since December 2025. CEO Wan Razly Abdullah blamed the conflict between the US and Iran for exacerbating Malaysia's cost-of-living pressures, which strains consumer sentiment and spending. The bank, Malaysia's 7th largest by assets, has shed nearly 21% of its value since February, amid concerns over rising bad debt allowances.

These provisions more than doubled to RM78.8 million in Q2. Analysts note that credit costs have remained high for two quarters, and investors seek clearer signs that credit costs are peaking and assets are stabilising. Affin's income rose 12.2% in the first half of FY2026, but surging credit costs offset the gains. HLIB downgraded the stock to "hold" from "buy", citing weaker near-term return on equity and delayed earnings recovery. The Sarawak government remains Affin's largest shareholder with a 31.25% stake.