KUALA LUMPUR: AEON Credit Service (M) Bhd is doubling its capital expenditures (capex) allocation from RM60 million in the last financial year ended 28th February 2018, to RM120 million this year.
According to chairman Ng Eng Kiat, the additional allocation will be put towards a number of uses which includes branches transformations, upgrading web application and self-service terminals.
"As of February, we have about 66 branches that needs upgrading. We will also upgrade our system infrastructure which is about 20 years old now,” he said at the conclusion of the firm’s 21st Annual General Meeting (AGM) today.
The firm is also targeting to increase its credit cards in circulation numbers to some 400,000 this year from 260,000 in FY18.
Ng however was quick to point out that meeting this target would be challenging.
“The market is challenging given that AEON Credit is late to the game. We have a limited population which are already customers to existing banks,” said Ng.
“On top of that, Bank Negara Malaysia have increased the eligibility criteria for credit cards ownership. Given these challenges, we are keen on making the target of 400,000 but we are also very well aware of the challenges.”
The company's total financing receivables grew 11.1 per cent to RM7.16 billion in FY18, from RM6.44 billion the year before. Of the total, vehicle financing was highest at 58.5 per cent, followed by personal financing at 26.4 per cent.
When asked, Ng said that Aeon Credit is definitely looking to grow its loans growth but declined to comment further.
“However, we do expect private consumption to be sustained, supported by continued growth in employment and income, lower inflation and improving customer sentiments,” he said.
The company is also set to launch two new digital products this year, namely the AEON Wallet and Aeon Member Plus Card.
Chief financial officer Lee Kit Seong said with the AEON Wallet, the company will first target the existing six million members across its group of companies that include AEON BiG and the AEON department stores.
“We will be targeting our members first for the first year of the e-wallet. We will then spread it out to non-members after the first year,” said Lee.
AEON Credit reported increase of 13.2 per cent in net profit to RM300 million in FY18, on the back of RM1.24 billion revenue. As such, a total dividend of 41.13 sen per share was declared.