Affin Bank Berhad | Annual Report 2020

Dear Shareholders, During the height of the global COVID-19 pandemic in the first half of 2020, we at Affin Bank Berhad (“AFFIN BANK”, “the Group”, or “the Bank”) decided to embark on our journey of transformation, taking on the challenges and turning them into opportunities. In November 2020, as the country was still in the Movement Control Order (MCO), we took the opportunity to refresh our brand by revealing our new logo to the nation, signaling the metamorphosis journey that the Group is undertaking. The new logo is a modern depiction of Malaysia’s beloved national flower, the hibiscus. It is a fitting logo, as it not only takes us back to the Group’s earliest days; it symbolises our future as a blossoming creative and innovative financial organisation. Our employees are our greatest asset and I am proud to say that our people have shown tremendous resilience in this challenging time, particularly our frontliners who have to face the customers everyday. The ability to adapt and to learn helped the Group to record its commendable growth and progress in a number of key business areas. With the close of 2020, we are pleased to see the beginnings of what we hope to be the florescence of the Bank in the coming year, hence the theme of our Annual Report for 2020. On this note, I am pleased to share with you the highlights and achievements for the financial year ended 31 December 2020 (“FY2020”). UNIQUE CHALLENGES IN A UNIQUE LANDSCAPE The year 2020 has brought unprecedented challenges that gave rise to the “new normal” in Malaysia and the banking industry. The modern world has never faced a pandemic of this scale and the resulting adverse economic conditions. As most countries in the world started to shut down its borders and its businesses due to this pandemic, Malaysia, too, announced its nationwide MCO in March 2020 which impacted all economic sectors and saw a systemic shift in the way businesses operate. Many of these businesses – including individuals – were left in dire need of financial assistance due to the loss of business, unemployment, inability to service debt obligations, tenancy commitments and supply chain disruptions. To cushion the impact, the Government introduced four stimulus packages: PRIHATIN, PRIHATIN SME+, PENJANA and KITA PRIHATIN, which aimed at protecting the livelihood of Malaysians. Following the implementation of MCO 2.0 in 2021, the Government also announced additional stimulus measures worth RM16.2 billion under the PERMAI and PEMERKASA schemes. Spillover effects of the RM321.2 billion or 20.4% of GDP worth of economic stimulus packages are expected to augment economic recovery in 2021. To maintain an accommodative monetary policy, Bank Negara Malaysia (BNM) cut its Overnight Policy Rate (OPR) by a total of 125 basis points in 2020, down to 1.75% in July 2020, the lowest in this decade. This placed further pressure on the Bank’s margins. The Bank sought sustainable growth by remaining disciplined in pricing, supported by stringent risk management practices with emphasis on improving liquidity and capital strength. In support of government initiatives, the Bank disbursed COVID-19 relief funds to help ease the burdens of our customers. In order to play our part to help our customers, we introduced our own Financial Assistance and Instalment Relief (FAIR) programme. The FAIR programme is a specially customised and supportive financial assistance solution for individual, SME and corporate customers. Under the FAIR programme, we approved more than 200 SME customer applications with outstanding financing of approximately RM900 The Board of Directors attended a half-day talk on Mind-shift Series: Staying Relevant in the Age of Disruption and Innovation on 30 September 2020 11 MESSAGE FROM THE CHAIRMAN AFFIN BANK BERHAD 197501003274 (25046-T) | ANNUAL REPORT 2020