AEON Credit Service (M) Berhad reported a 20% rise in pre-tax profit for its first quarter, to RM130.9 million.
The group’s share of AEON Bank losses narrowed to RM17.7 million over the same period, down from RM31.2 million in the preceding quarter.
The results, for the quarter ended 31 May 2026, cover the first three months of AEON Credit’s financial year ending February 2027.
Revenue rose 7.9% to RM647.6 million and net profit climbed 20.5% to RM93.4 million, which the group attributed to stronger loan and financing growth. Earnings came in at 18.64 sen per share.
Digital Bank Losses Ease, in Line With Guidance
AEON Bank is Malaysia’s first Islamic digital bank, owned equally by AEON Credit and Japan’s AEON Financial Service.
Because AEON Credit holds its 50% stake as an associate rather than a controlling interest, it books only its proportionate share of the bank’s losses.
That share is still wider than a year ago, when it stood at RM15.9 million, but the sequential drop is the more useful signal.
AEON Credit had already told investors it expected AEON Bank’s losses to ease in FY2027 after two years spent building out the bank’s core infrastructure.
The group injected RM125 million into the digital bank late last year, matched by its Japanese partner, to support the next phase of asset growth.
Bad Loans Creep Up Among Younger Borrowers
The quarter was not uniformly positive.
Against the immediately preceding quarter, pre-tax profit fell 34.5%, from RM199.9 million, as impairment costs on financing receivables jumped to RM236.1 million from RM132.7 million. Write-offs alone reached RM224.4 million for the quarter.
The non-performing loans ratio edged up to 2.60% from 2.57% a year earlier, while loan-loss coverage thinned to 195% from 217%.
AEON Credit linked the deterioration to cost-of-living pressure on certain customer segments, particularly younger and lower-income borrowers, and said corrective action was under way.
Gross financing receivables reached RM16.07 billion, RM1.44 billion higher than a year earlier.
The group said it would keep growing quality financing assets while monitoring credit risk, and would lean on the wider AEON ecosystem, including its majority-owned loyalty unit AEON360, to expand its customer base.
Featured image: Edited by Fintech News Malaysia based on an image by salmangraphics0839 via Magnific.
