Announces 13.00 sen Interim Dividend, Demonstrating Commitment to Shareholder Value

AEON Credit Service (M) Berhad (“AEON Credit” or “the Group”) today reported a 14.1% year-on-year (“YoY”) growth in revenue to RM617.88 million for the second quarter ended 31 August 2025 (“Q2FYE26”), compared to RM541.43 million in the corresponding quarter last year (“Q2FYE25”). The revenue growth was mainly driven by stronger loan and financing activities, with total transaction and financing volume increasing 8.7% to RM2.35 billion, from RM2.16 billion in Q2FYE25, underscoring sustained portfolio growth and healthy customer demand.

Gross financing receivables expanded to RM15.15 billion as at 31 August 2025, an increase of RM1.96 billion from a year earlier, driven by growth in personal financing, credit card business and auto financing. The Non-Performing Loans (“NPL”) ratio improved to 2.49% from 2.57% on 31 May 2025. Proactive measures are being implemented to address the increase and preserve asset quality, including the strategic expansion into middle-income segment to drive quality asset growth.

Other income strengthened to RM56.35 million, up from RM52.03 million in Q2FYE25, supported by improved bad debt recoveries, reflecting the Group’s resilience in managing its financing portfolio.

For the quarter under review, the Group recorded a Profit Before Tax (“PBT”) of RM103.05 million, a 1.9% increase compared to RM101.04 million in Q2FYE25. Profit After Tax (“PAT”) rose 1.5% to RM72.23 million, from RM71.16 million in the previous corresponding quarter. This is despite accounting for the Group’s share of losses amounting to RM18.50 million from its associate company, AEON Bank (M) Berhad (“AEON Bank”). These losses primarily stemmed from ongoing strategic investments in product development, IT infrastructure, and operating capacity, aligned with AEON Bank’s roadmap to deliver differentiated digital banking solutions. These upfront investments in technology, talent, and marketing are expected to support AEON 2/3 Bank’s long-term growth trajectory.

For the financial period-to-date (“1HFYE26”), the Group’s total transaction and financing volume grew by 11.2% to RM4.59 billion, compared to the corresponding period last year (“1HFYE25”). This translated into a 14.5% increase in total revenue to RM1.22 billion, from RM1.06 billion in 1HFYE25, reflecting sustained demand and portfolio expansion.

The Group recorded a lower PBT of RM212.08 million, compared to RM245.96 million in the same period last year. The decline was mainly due to higher impairment losses on financing receivables by RM115.92 million and higher operating expenses of RM27.38 million in line with the increased transaction and financing activities. The impact was partially mitigated by incremental revenue gains during the period. The Group is mitigating impairment risks through prudent credit risk management, including digital assessments and AI-based scoring to strengthen customer selection, tighter controls on underperforming segments, and enhanced collection strategies. These measures, together with a diversified portfolio approach, will underpin sustainable growth and asset quality.

The Board has proposed the payment of an interim single-tier dividend of 13.00 sen per share for the financial year ending 28 February 2026, amounting to RM66.38 million, representing a dividend payout ratio of 44.3%. The proposed dividend, payable on 6 November 2025, reflects the Group’s continued commitment to delivering sustainable returns and creating value for shareholders.

PROSPECTS:

Malaysia’s Gross Domestic Product (“GDP”) expanded by 4.4% in the second quarter of 2025, supported by domestic consumption and investment. Bank Negara Malaysia has revised its 2025 growth forecast upwards, from 4.0% to 4.8%, providing a more supportive outlook for consumer and financing demand. Against this backdrop, AEON Credit will maintain a cautious stance, focusing on quality asset growth, prudent credit risk management, and operational efficiency.

This quarter saw a joint venture with AEON CO. (M) BHD to establish AEON360, a platform to integrate customer membership, data intelligence and digital engagement, enabling seamless rewards and personalised offers across AEON’s ecosystem, in line with its purpose of “Bring 3/3 Finance Closer to Everyone”.

The new entity will manage AEON Group’s customer loyalty platform and is expected to expand its services to external partners. Upon AEON Credit’s subscription of a 51% share in AEON360, the company will be recognised as a subsidiary of AEON Credit.

Additionally, AEON Bank has launched AEON Bank Biz, a Shariah-compliant business banking solution aimed at empowering Malaysian businesses through ethical, inclusive, and digitally optimised banking services. Its offerings include Business Current Account-i and integrated cash management capabilities. Initial onboarding will focus on corporate customers within the AEON Group of Companies in Malaysia, facilitating the disbursement of AEON Credit loans to their customer and enabling settlement with AEON Credit’s motorcycle leaders and AEON Retail supplier upon the completion of business banking products development.

Barring unforeseen circumstances, the Group expects to sustain its business momentum for the financial year ending 28 February 2026.