Net Profit rises 20.5% YoY to RM93.43 million as transaction and financing volume and revenue continue to expand 

AEON Credit Service (M) Berhad (“AEON Credit” or “the Group”) reported a steady performance for the financial quarter ended 31 May 2026 (“Q1FYE27”), with Profit After Tax (“PAT”) increasing by 20.5% year-on-year (“YoY”) to RM93.43 million, compared to RM77.55 million in the corresponding quarter last year (“Q1FYE26”).

The increase in PAT was primarily driven by robust revenue growth attributed by stronger loan and financing growth, alongside a lower operating expense ratio. This was partially offset by higher finance costs in line with receivables growth and higher share of losses from the Group’s associate, AEON Bank (M) Berhad (“AEON Bank”). Revenue increased by 7.9% from RM599.92 million to RM647.57 million, while Profit Before Tax (“PBT”) rose by 20% from RM109.03 million to RM130.88 million.

The Group’s transaction and financing volume increased by 4.6% YoY to RM2.35 billion in Q1FYE27. Gross financing receivables expanded to RM16.07 billion as at 31 May 2026, representing growth of 9.8% YoY or RM1.44 billion higher than the corresponding quarter of the preceding year.

The Non-Performing Loans (“NPL”) ratio stood at 2.60%, compared to 2.57% a year earlier. AEON Credit continues to maintain prudent credit risk management practices and the loan loss coverage ratio remained healthy at 195%, compared to 217% recorded a year earlier. Other income for the quarter was recorded at RM55.19 million, mainly attributable to bad debt recoveries of RM51.79 million. The ratio of total operating expenses to revenue was 63.0%, as compared to 68.5% in the corresponding quarter of the previous year.

The Group also equity-accounted its proportionate share of losses in AEON Bank amounting to RM17.69 million during the quarter, compared to RM15.92 million in the corresponding quarter of the previous year. AEON Bank will continue to prioritise its business banking products, targeting the financial needs of merchants and suppliers within AEON ecosystem, supporting the Bank’s long-term growth trajectory through strengthened collaboration across the AEON Group of Malaysia.

PROSPECTS:
Malaysia’s Gross Domestic Product (“GDP”) recorded growth of 5.4% in the first quarter of 2026, compared to 6.3% in the preceding quarter, driven by resilient domestic consumption and stronger export performance. Bank Negara Malaysia (“BNM”) has projected the Malaysian economy to grow between 4.0% and 5.0% in 2026, supported by sustained domestic demand and continued investment activities, notwithstanding external headwinds and ongoing global uncertainties.

Against this economic backdrop, the Group continues to adopt a cautious and prudent business approach, considering the heightened geopolitical conflict in the Middle East, which has disrupted global supply chains, along with persistent inflationary pressures arising from higher global oil prices and volatility in global financial markets. The Group remains focused on growing quality financing assets and closely monitoring the inherent credit risks within its financing portfolio, while enhancing its information technology capabilities to improve operational efficiencies and maintain effective cost discipline. In addition, the Group will continue to leverage the broader AEON Group ecosystem in Malaysia to further expand its customer reach.

Barring any unforeseen circumstances, the Group expects to be able to sustain its business momentum through the continued implementation of appropriate strategic & operational measures for the financial year ending 28 February 2027. In line with its long-term transformation agenda, the Group’s strategic direction for FYE2027 is centred on advancing into a more integrated financial, retail and lifestyle ecosystem, building on the foundations established through AEON Wallet, AEON Insurance Brokers (M) Sdn. Bhd. (“AEON Insurance”), AEON Bank and AEON360 Sdn. Bhd. (“AEON 360”).

Strategic execution for the year will focus on five key priorities: strengthening the credit card and payment business through product innovation and ecosystem-driven growth, including expanded DuitNow functionality and integrated wallet features; driving operational efficiency through digitalisation and AI adoption, including AI-enabled collections and increased auto-approvals via AEON FinPlus; establishing a dedicated Data & AI Centre of Excellence to consolidate data expertise and build scalable data infrastructure; strengthening a Group-wide collaboration framework to unlock synergies across the AEON ecosystem, including deeper platform integration through AEON360; and further developing its management team and leadership pipeline through structured succession planning.