About Aeon Credit ...

It will tap the strong card base of AEON Big and cross sell its personal financing, credit cards, insurance and general easy payment scheme.

AEON Credit is committed to complying with the obligatory debt to equity ratio of less than 5.25 and a net cost of capital below 5%.

On a segmental basis, AEON Credit’s transaction volume in FY2014 for the vehicle easy payment segment, credit card business and personal financing recorded a growth of 77%, 15% and 3%.

SME segment is another operation that AEON Credit will strengthen.

AEON Credit max tenure for its financing portfolio is five years.

Its 1QFY2013 ended May 31 core profit of rm56 million was within market expectations.

Its interest income surged along with 44% receivables growth. Vehicle financing, which combines the motor, used car and new car segments, was the top performer with 108% year on year growth in receivables.

AEON Credit’s capital adequacy ratio, at some 19% was above the minimum 19% was also above the minimum 16% requirement due to the rm143 million perpetual notes.

Net interest margins continued to be compressed at 15.6% versus 16.7% a year ago.

Asset quality deteriorated further as its NPL ratio reached a five year high of 2.18% from 1.56% in 1QFY2014. It was noted that collection ratios fro some segments within the vehicle easy payment scheme dropped due to its exposure to low income customers.

The company is enhancing its credit scoring system and tightening its approval criteria.