kuala lumpur: According to AEON Credit Services (Malaysia), AEON Group’s AEON Bank plans to break even within five years by leveraging its brand power and market presence.
AEON Bank, Malaysia’s first Islamic digital bank, is one of five digital bank license holders in the country. AEON Bank is jointly owned and operated by AEON Financial Services Sdn Bhd and AEON Credit Sdn Bhd, subsidiaries of the AEON Group.
Aeon Credit’s chief financial officer Lee Siew Tee said the bank has received a more positive response from depositors than it expected since the service launched on May 26.
“I cannot disclose the number of deposits, but it is higher than expected. We will continue to introduce new products, subject to approval from Bank Negara Malaysia,” she told a press conference after AEON Credit’s shareholders’ meeting today.
Aeon Credit managing director Daisuke Maeda said the Aeon Group’s strong presence through Aeon shopping malls and brand recognition among households gave it a competitive advantage.
“We have a strong presence in the market, especially in AEON shopping malls, which is a well-known domestic household brand. AEON Credit also has a large customer base. This gives us an advantage in that we can offer more attractive financial products. We offer not only financial products, but also benefits that are integrated into our customers’ daily lives and shopping.”
“Currently, with our digital bank, when you open a bank account you get 3,000 AEON points and when you spend with your debit card you also get AEON points. This is very unique in that it integrates financial services with the shopping experience. This is an advantage in the digital banking market,” he added.
AEON Credit chairman Ng Eng Kiat acknowledged that the digital banking sector is competitive, with four other digital banks competing in the market, including previously established GX Bank.
“So instead of just launching products linked to deposits, which are on one side of the balance sheet, we need to look at lending as well,” he said.
However, Ng said this was a gradual development as the bank ensured a strong cybersecurity foundation before launching new products on both sides of its balance sheet – deposit and loan products.
“We have to be really careful. And with any business, there’s always a lead-time. And for banks, the lead-time is longer because they need to undergo proper due diligence before they can launch a product,” he added.
All resolutions tabled and submitted at the Group’s 27th Annual General Meeting were approved by shareholders.
A proposed final single-tier dividend of 14 sen per share for the financial year ending Feb 29 2024 (FY24) was also approved by shareholders, representing a total dividend payout of RM144.2 million, or 34% of group net profit.
AEON Credit’s revenue for FY24 increased 16.6% to RM1.91 billion from RM1.64 billion the previous year.
The increase was driven by higher transaction and loan volumes, up 16.9% year-on-year to RM7.3 billion, which resulted in profit before tax increasing to RM565.17 million and profit after tax reaching a record high of RM424.02 million.
Easy payments and personal financing continued to be the main drivers of the Group’s revenue and profit growth.
Total fundraising generated by this segment increased 18.9% to RM5.28 billion in FY24 from RM4.4 billion in FY23.
Maeda highlighted the positive progress made in digital transformation efforts.
“Last year, we introduced instant approval using credit information and a risk-based interest rate system based on customer scores, which allows us to offer many customers a credit limit in under a minute. What’s more, customers with high scores are automatically approved instantly.”
As a result, the company has captured demand from customers, especially for used car financing solutions, leading to a significant expansion in used car loan sales, up 50% year-on-year to RM1.11 billion, and has maintained this sales momentum this year, he said.
Maeda said AEON Wallet will be upgraded in stages to promote digitalization and reach a wider range of segments.
“We will use Wallet as a common membership app for the AEON Group and enhance Wallet payments and point programs. We will also offer a variety of financial products through the app, aiming to further improve customer convenience. Furthermore, we will integrate AEON Bank into our ecosystem to provide comprehensive financial services,” he added.
