DRIVING GROWTH THROUGH

DIGITALISATION
Driving growth through digitalisation - The design
reflects growth for AEON Credit with an upwardly
mobile path. Lines of varying angles in AEON Credit
colours are used to create shapes, pointing upwards
to a brighter future. Stylised large rectangles built from
smaller rectangles demonsrate the varied products
of AEON Credit, moving in unity. The modern, simple
lines are drawn together, creating a symbolic element
of form and function - signifying togetherness and
strength of AEON Credit.

The tagline ‘Driving growth through digitalisation

depicts the aspirations of AEON Credit to realise
primarily, an Internet of Things (“IoT”) based future.
DRIVING GROWTH THROUGH
DIGITALISATION
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
ABOUT THIS REPORT
SUSTAINABILITY THROUGH INTEGRATED REPORTING
This is AEON Credit Service (M) Berhad’s (“AEON Credit” or “the Company”) inaugural Integrated Annual Report 2021 (“IAR”),
prepared in accordance with the principles set by the International Integrated Reporting Council (“IIRC”). Embarking on the
Integrated Reporting (“<IR>”) journey is an important step for us, in terms of setting our approach towards value creation and
management, whilst expanding the integration of sustainability to drive the business in perpetuity. This report is a credible medium
to disseminate information critical to our business and growth, and to communicate with our stakeholders with integrity and
transparency.

SCOPE AND BOUNDARY We are cognizant that sustainability is a journey and over the
past three years we have been taking steps to progressively
This IAR extends beyond financial reporting and includes improve our sustainability performance and reporting. As we
non-financial performance of AEON Credit and specifies expand data collection on our social, environmental, and
that material matters, opportunities, risks and outcomes economic performance as well as establish KPIs, we see our
attributable to or associated with the Company’s key reports evolving to become more in-depth.
stakeholders, which have a significant influence on its ability For more information on the Company’s Material Sustainability Matters, please turn
to create value. to page 33

Unless otherwise indicated, this IAR covers the period OUR CAPITALS
from 1 March 2020 to 28 February 2021 and encapsulates
the primary activities of the Company, namely our overall
performance for the year under review and the delivery of our
initiatives towards our strategic goals.

REPORTING PRINCIPLES & FRAMEWORKS

In producing this report, we are guided by the International
Integrated Reporting <IR> Framework issued by the HUMAN FINANCIAL
International Integrated Reporting Council as well as the Main
Market Listing Requirements (“MMLR”) of Bursa Malaysia
Securities Berhad (“Bursa Securities”), the Companies Act
2016 (“CA 2016”) and the Malaysian Code on Corporate
Governance by the Securities Commission Malaysia.

Additionally, the financial statements of AEON Credit have

been prepared in accordance with the Malaysian Financial
Reporting Standards, the International Financial Reporting MANUFACTURED INTELLECTUAL
Standards and the requirements of the CA 2016 for the
financial year ended 28 February 2021. Our non-financial
information is prepared in accordance with Global Reporting
Initiative (“GRI”) Standards: Core Option, the global standards
for sustainability reporting. A complete discussion of our
sustainability performance can be found in our Sustainability
Statement.

ASSURANCE SOCIAL AND NATURAL

RELATIONSHIP
Our financial statements are independently audited while the
development of our non-financial reports is supported by our For more information on the Company’s Capitals, please turn to page 32
robust internal controls and good governance practices.

APPROACH TO MATERIALITY APPROVAL BY THE BOARD

In line with Bursa Securities’s MMLR and the Company’s The Board acknowledges its responsibility in ensuring the
Sustainability Reporting Framework, the Company continues integrity of this IAR, which in its opinion addresses issues that
to uphold the principles of governance and transparency in are material to the Company’s ability to create value and fairly
its business dealings. Materiality is a key content element presents the integrated performance of AEON Credit.
in <IR> and will be assessed yearly. The Company aims to
regularly assess its materiality topics from the perspective of
value creation as well as in terms of the impacts or potential
NG ENG KIAT YURO KISAKA
impacts of material topics on business strategies, risk factors,
Chairman Managing Director
capitals and future business priorities.
CONTENTS

01
7
WHO WE ARE

Corporate Information
8 About AEON Credit Service (M) Berhad
9
10
12
Corporate Philosophy and Mission
Corporate Milestones
AEON Credit Branch / Counter Network /
06
44
OUR COMMITMENT TO GOOD
CORPORATE GOVERNANCE

Sustainability Statement
E-Money Kiosk
60 Corporate Governance Overview
13 AEON Basic Principles and Statement
Code of Conduct
71 Audit Committee Report
14 AEON Human Resource Principles
74 Board Risk Committee Report

02
77 Statement on Risk Management and
OVERVIEW Internal Control
82 Directors’ Responsibility Statement
16 5-Year Financial Highlights 83 Additional Compliance Information
Disclosures
18 Investor Information

03
22
REFLECTIONS FROM
TOP LEADERSHIP
Chairman’s Statement
07
85
FINANCIAL STATEMENTS

Directors’ Report
26 Management Discussion and 89 Independent Auditors’ Report
Analysis 93 Statement of Financial Position

04
94 Statement of Profit or Loss and
Other Comprehensive Income
VALUE CREATION
95 Statement of Changes in Equity

31 Our Approach to Value Creation 96 Statement of Cash Flows

32 Value Creation Model 99 Notes to the Financial Statements

145 Statement by Directors and

05
Statutory Declaration

08
LEADERSHIP TEAM
OTHER INFORMATION
35 Board of Directors
41 Key Leadership 147 Analysis of Shareholdings
42 Senior Leadership 149 Notice of Annual General Meeting
Proxy Form
01 WHO WE ARE
7 Corporate Information
8 About AEON Credit Service (M) Berhad
9 Corporate Philosophy and Mission
10 Corporate Milestones
12 AEON Credit Branch / Counter Network /
E-Money Kiosk
13 AEON Basic Principles and
Code of Conduct
14 AEON Human Resource Principles
 7

C O R P O R AT E I N F O R M AT I O N

BOARD OF DIRECTORS

NG ENG KIAT YURO KISAKA

Chairman/Non-Independent Non-Executive Director Managing Director

DATO’ MD KAMAL BIN ISMAUN TOMOKATSU YOSHITOSHI

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
Non-Independent Non-Executive Director Independent Non-Executive Director

S SUNTHARA MOORTHY A/L S SUBRAMANIAM DATUK ADINAN BIN MANING

Independent Non-Executive Director Senior Independent Non-Executive Director

DATIN KHOO PEK LING DATIN YASMIN AHMAD MERICAN

Independent Non-Executive Director Independent Non-Executive Director

RASHIDAH BINTI ABU BAKAR MASAAKI MANGETSU

Independent Non-Executive Director Non-Independent Non-Executive Director

LEE TYAN JEN

Executive Director

REGISTERED OFFICE SECRETARY

TAI YIT CHAN
SSM PC No. 202008001023
(MAICSA 7009143)
12th Floor, Menara Symphony
No. 5, Jalan Prof. Khoo Kay Kim
Seksyen 13, 46200 Petaling Jaya, Selangor HEAD OFFICE
T : +603-7890 4800 • F : +603-7890 4650

Level 18, UOA Corporate Tower

Avenue 10, The Vertical, Bangsar South City
AUDITORS No. 8, Jalan Kerinchi, 59200 Kuala Lumpur
Deloitte PLT (LLP0010145-LCA) (AF0080) T : +603-2772 9000 • F : +603-2711 4110
Chartered Accountants
Level 16, Menara LGB
1, Jalan Wan Kadir, Taman Tun Dr Ismail
60000 Kuala Lumpur
T : +603-7610 8888 • F : +603-7726 8986 REGISTRAR
Boardroom Share Registrars Sdn. Bhd.
11th Floor, Menara Symphony
WEBPAGE No. 5, Jalan Prof. Khoo Kay Kim
www.aeoncredit.com.my
Seksyen 13, 46200 Petaling Jaya, Selangor
T : +603-7890 4700 • F : +603-7890 4670
STOCK EXCHANGE LISTING
The Company is a public listed company, incorporated and CORPORATE CALENDAR
domiciled in Malaysia and listed on the
Main Market of Bursa Malaysia Securities Berhad Notice of Annual General Meeting 22 May 2020
STOCK NAME : AEONCR
STOCK CODE : 5139 Annual General Meeting 24 June 2020
Payment of Dividend (Interim)
• Book Closure 15 October 2020
PRINCIPLE BANKERS • Payment 5 November 2020
CIMB Bank Berhad
CIMB Islamic Bank Berhad Payment of Dividend (Final)
Citibank Berhad • Book Closure 1 July 2021
Deutsche Bank (Malaysia) Berhad • Payment 15 July 2021
Maybank Islamic Berhad
Mizuho Bank (Malaysia) Berhad First Quarter Results Announcement 25 June 2020
MUFG Bank (Malaysia) Berhad Second Quarter Results Announcement 29 September 2020
RHB Bank Berhad
RHB Islamic Bank Berhad Third Quarter Results Announcement 21 December 2020
Standard Chartered Saadiq Berhad Fourth Quarter Results Announcement 8 April 2021
Sumitomo Mitsui Banking Corporation Malaysia Berhad
 8

ABOUT AEON CREDIT SERVICE (M) BERHAD

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

AEON Credit Service (M) Berhad was PRODUCT

incorporated on 6 December 1996 and FINANCING
converted into a public limited on 9 February
2007. The Company was then listed on the
Main Market at Bursa Malaysia Securities
Berhad on 12 December 2007.

Ever since its inception in 1996, AEON Credit

has expanded across Peninsular Malaysia
and East Malaysia.
 9

C O R P O R AT E P H I L O S O P H Y A N D M I S S I O N

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
C O R P O R AT E P H I L O S O P H Y
OUR CORPORATE PHILOSOPHY is to support customers’ lifestyles
and enable each individual to maximise future opportunities through
effective use of credit.

MISSION
As a reflection of this philosophy, OUR MISSION is to provide a wide
range of consumer financial services that best meet customer needs
and we are committed to serve customers to enhance their lifestyle
through our products and services. We adhere to a strict code of
corporate ethics and, at the same time, engage in activities which
contribute to society.
 10

C O R P O R AT E M I L E S T O N E S

1996 2004 2008 (continued)

• Incorporated on • Full expansion of Personal Financing • Expanded nationwide
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

6 December 1996. Scheme to major towns nationwide. network of service centres

• Entered into agreements with and branches by establishing

1997
Visa International Service 3 service centres inside new
Association and MasterCard JUSCO Shopping Centres.
International Incorporated to
• Commenced operations by issue credit cards.
providing General Easy Payment • Obtained ISO 9001:2000 UKAS 2009
Scheme for consumer durables. Quality Management System,
certified by UKAS, in line with • Launched New AEON Card

1998 our vision of providing excellent with AEON CO. (M) BHD.
customer service. • Established one service centre
at AEON Bandaraya Melaka
• Began issuing AEON Express Shopping Centre and 6
Card (a privilege card). 2005 marketing offices in Sandakan,
• Expansion of General Easy Sibu, Segamat, Sitiawan,
Payment Scheme within • Started insurance sales business. Taiping and Sungai Petani.
Peninsular Malaysia, outside • Obtained approval from Bank • Established AEON Credit’s
Klang Valley namely Ipoh, Negara Malaysia to issue credit cards. Representative Office in
Perak and Melaka. • Launched AEON Credit Card. Mumbai, India.
• Launched JUSCO Credit Card, • Launched RM150 million

1999

co-brand credit card with
AEON CO.(M) Bhd.


asset-backed medium term
notes programme.
• Opened AEON Credit Service
• Expansion of General Easy Centre within shopping centres
Payment scheme and outside Klang Valley. 2010
operations to East Malaysia
in Kuching, Sarawak and • Launched “2 in 1” AEON
Kota Kinabalu, Sabah. 2006 MasterCard Credit card
with JCard loyalty points

2001 •
•
Launched specific purpose financing.
Obtained ISO 27001:2005
function.
• Expansion of Motorcycle
for Information Security Easy Payment (“MEP”) scheme
• Set-up branches in Kuching, Management System. to provide financing for
Sarawak and Johor Bahru, • Established 3 service centres higher c.c. motorcycle.
Johor with marketing, credit in JUSCO Shopping Centres
assessment and credit bringing nationwide network to 24.
management operations. 2011
2002 2007 • Established one new
service centre.
• Launched RM400 million • Launched RM200 million
• Launched Motorcycle Easy commercial paper/medium term single investor medium
Payment (“MEP”) Scheme, notes programme. term programme.
with 50 appointed merchants • Launched ATM network and • Launched AEON Prepaid Card.
within Klang Valley and later AEONCASH @ ATM.
in Johor Bahru, Johor. • Launched AEON & JUSCO
• Changed name from ACS Credit Gold Visa Credit Card. Launched 2012
Service (M) Sdn. Bhd. to AEON Motorcycle Association Affinity
Credit Service (M) Sdn. Bhd. Gold Visa Card. • Launched Watami
• Listed on Main Board of Bursa co-brand Card.

2003 Malaysia Securities Berhad. •

Launched nationwide Used Car
Easy Payment Scheme (“UCEP”).
• Established 7 new service
•

Launched Personal Financing
Scheme, which is based
2008 centres and branches.
• Recognised by Finance
on Shariah principles. • Launched CRUIZE Visa Card Asia as “Best Mid-Cap”
• Set-up first AEON Credit with Automobile Association in Malaysia under “Asia’s
Service Centre in Kuala Lumpur. of Malaysia (“AAM”). Best Company 2012”.
• Launched AEON Zing card
with Touch ‘n Go Sdn. Bhd.
• Established 3 regional
offices in Pulau Pinang, Johor
and Pahang.
 11

C O R P O R AT E M I L E S T O N E S

2013 2018 2020

• Launched AEON BiG • Launched AEON Platinum credit • Issued RM500 million inaugural senior

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
Customer Loyalty programme. card (Visa and MasterCard). sukuk.
• Established 12 branches and • Introduced new Personal Financing
service centres nationwide.
• Launched RM400 million
scheme with risk-based pricing for
middle income customer segment.
2021
Perpetual Sukuk Programme • Launched the AEON Member Plus • Issued RM200 million inaugural
and RM400 million Perpetual Visa card and AEON Wallet, a subordinated sukuk.
Private Debt Securities mobile e-wallet application. • Launched AEON Protect, a device repair
Programme. • Launched the Financial Literacy service plan under the Mobile Device
programme as part of AEON financing scheme.
2014
Credit’s CSR initiatives. • Implemented CTOS e-KYC solutions.
• Named as one of 46 Malaysian
companies and recognised as the
• Additional 5 branches “Best companies to work for in Asia”
established nationwide. by HR Asia Awards Malaysia 2018.
• Issued perpetual notes and • Won 3 awards for “Highest Return
perpetual sukuk amounting to on Equity Over Three Years”,
RM146 million and RM130 “Highest Growth in Profit After
million respectively. Tax over three years” and “Highest
Returns to Shareholders over three

2015 years” at The Edge Billion Ringgit

Club Corporate Awards 2018 under
the Financial Services sector (Below
• Launched AEON BiG co-brand RM10 billion market capitalisation)
credit card with Visa payWave category.
function.
• Won awards for “Most Profitable
Company” and “Highest Profit 2019
Growth Company” at The Edge
Billion Ringgit Club Corporate • Obtained a moneylending license
Awards 2015 under the under the Moneylenders Act 1951
Financial Services sector and Moneylenders (Control and
(Below RM10 billion market Licensing) Regulations 2003.
capitalisation) category. • Won the “Highest Return to
• 60th branch opened Shareholder after Three Years”
in Sibu, Sarawak. award at The Edge Billion Ringgit
Club Corporate Awards 2019

2016 under the “Financial Services

sector (Below RM10 billion market
capitalisation)” category.
• Won awards for “Highest Return • Named as one of 49 Malaysian
on Equity over Three Years” companies and recognised as the
and “Highest Growth in Profit “Best companies to work for in
Before Tax over Three Years” Asia” by HR Asia Awards Malaysia
at The Edge Billion Ringgit Club 2019.
Corporate Awards 2016 under • Awarded “Highest Card Growth –
the Financial Services sector Consumer Credit for highest
(Below RM10 billion market Year On Year growth for Credit
capitalisation) category. Cards acquisition (new issuance)”
and “Highest Payment Volume Growth.
2017 Consumer Credit for highest Year
On Year growth usage (CP sales
volume)” by the Visa Malaysia Bank
• Won award for “Highest Return Awards 2018/2019.
on Equity over Three Years” at • Established Sukuk Wakalah
The Edge Billion Ringgit Club Programme of RM2.0 billion in
Corporate Awards 2017 under nominal value for the issuance of
the Financial Services sector senior sukuk and / or subordinated
(Below RM10 billion market sukuk.
capitalisation) category. • Launched the AEON Credit
Executive Business Card.
 12

AEON CREDIT BRANCH / COUNTER NETWORK /

E-MONEY KIOSK

AEON CREDIT BRANCH / COUNTER NETWORK

Central Region East Malaysia Northern Region

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

AEON Mid Valley Counter Kota Kinabalu Raja Uda

AEON BiG Mid Valley Inanam AEON Mall Seri Manjung
AEON Bandar Sunway Sandakan AEON Queensbay
IOI Mall Kuching Penang Inderawasih
AEON Mall Rawang Anggun AEON Mall Kuching Central AEON BiG Penang Prai
AEON Mall Bukit Tinggi AEON Mall Kuching Central Counter AEON Mall Bukit Mertajam
AEON Mall Seremban 2 Miri Sungai Petani
AEON Mall Nilai Sibu Alor Setar
Sri Gombak Ipoh
Setapak AEON Mall Klebang
Kajang Eastern Region AEON Mall Ipoh Station 18
Bangi AEON Mall Taiping
Senawang AEON Mall Kota Bharu
AEON Mall AU2 (Setiawangsa) Kota Bharu
AEON Mall Taman Equine
AEON Bandar Utama
Kuala Terengganu Southern Region
Kuantan
Banting Temerloh
Subang AEON Mall Bandar Dato’ Onn
Plaza Masalam PERLIS AEON Mall Tebrau City
Bandar Sri Permaisuri AEON Mall Bukit Indah
AEON BiG Jalan Kapar (Klang) AEON BiG Kluang
AEON Mall Bukit Raja KEDAH AEON Mall Kulaijaya
AEON BiG Section 23 Johor Bahru
AEON BiG Wangsa Maju Batu Pahat
AEON Mall Metro Prima PULAU Segamat
AEON BiG Subang Jaya PINANG KELANTAN TERENGGANU Melaka
PERAK AEON Mall Bandaraya Melaka Service Centre
AEON BiG Bukit Rimau
AEON Mall Shah Alam AEON Mall Bandaraya Melaka Counter
AEON Taman Maluri Shopping Centre

PAHANG

SELANGOR
KUALA
LUMPUR NEGERI
SABAH
SEMBILAN

MELAKA
JOHOR

AEON E-MONEY KIOSK

Southern Region SARAWAK

Central
AEON Melaka Shopping Centre
AEON Permas Jaya Shopping Centre Region
AEON BiG Sutera Utama
AEON Taman Universiti Shopping Centre East Malaysia
AEON CO. Tebrau City
AEON Mall Bandar Dato’ Onn Eastern Region
AEON Mall Kulaijaya
AEON Mall Bandaraya Melaka
Northern Region
AEON Mall Bukit Indah
AEON BiG Batu Pahat Central Region Southern Region
AEON BiG Ampang AEON Style Taman Maluri
Northern Region AEON BiG Tropicana City Mall AEON Mall Metro Prima
Eastern Region
AEON BiG Puchong Utama AEON Mall Nilai
AEON BiG Bukit Minyak AEON BiG Bandar Tun AEON Mall Shah Alam
AEON Mall Ipoh Klebang Hussein Onn AEON Mall Seremban 2 AEON Mall Kota Bharu
AEON Mall Kinta City AEON Mall Cheras Selatan AEON Mall AU2 AEON BiG Kuantan
AEON CO. Ipoh Falim AEON BiG Putrajaya AEON Mall Rawang
AEON CO. Ipoh Station 18 AEON BiG Sri Petaling AEON Mall Taman Equine
AEON CO. Seri Manjung AEON CO. Bandar Baru Klang AEON CO. Bandar Utama East Malaysia
AEON CO. Queensbay AEON CO. Bandar Puchong AEON CO. Mid Valley
AEON Mall Taiping AEON CO. Bandar Sunway AEON Mall Bukit Tinggi AEON Mall Kuching
AEON Mall Bukit Mertajam AEON CO. Wangsa Maju
 13

AEON BASIC PRINCIPLES AND CODE OF CONDUCT

AEON’s most basic and abiding principles are the pursuit of peace, respect for
humanity, and contribution to local communities through customer-centred initiatives.
Under these principles, we are determined to achieve global management standards.

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
All companies under the AEON Group are guided by the unchanging “Customer
First” philosophy. Its aim is to surpass expectations by combining excellent products
with unique personal services.

THE AEON CODE OF CONDUCT

COMMITMENT

1. AEON people are always grateful to

the many other individuals who provide
support and help, never forgetting to act
with humility.

2. AEON people value the trust of others

more than anything else, always
acting with integrity and sincerity in all
situations.
AEON BASIC PRINCIPLES
At AEON, we abide by the AEON Basic Principles
3. AEON people actively seek out ways to which consists of pursuing peace, respecting humanity,
exceed customer expectations. and contributing to local communities, always with the
customer’s point of view
as its core.

4. AEON people continually challenge

themselves to find new ways to
accomplish the AEON ideals.

5. AEON people support local community

growth, acting as good corporate citizens
in serving society.

PEACE PEOPLE COMMUNITY

AEON is a AEON is a AEON is a
corporate group corporate group corporate group
whose operations that respects rooted in local
are dedicated human dignity community life
to the pursuit of and values and dedicated
peace through personal to making a
prosperity. relationships. continuing
contribution to the
community.
 14

On the basis of the AEON Basic

Principles, AEON practices its
AEON
“Customer-First” philosophy with its HUMAN RESOURCE
ever-lasting innovative spirit.
PRINCIPLES
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

Our Promises to Our Customers AEON Credit Service (M) Berhad implements its
AEON endeavors to provide its customers mentoring programme based on the following AEON
with assurance and trust in their daily lives, Human Resource principles:
in keeping with the view that “everything
we do, we do for our customers”. AEON’s
FAIRNESS
1
never-ending mission is to make a positive
contribution to customer lifestyles. In evaluating and giving
feedback

AEON and the Local Community

RESPECT
2
AEON aims to set an example as a good
corporate citizen, working together with Each other’s opinions and
the community for its growth and the suggestion
improvement of quality of life.

3
OPENNESS TO CHANGE
AEON and its Business Partners Willing to take constructive
AEON respects innovative business feedback and improve
partners who help the Company achieve
its objective of “Customer Satisfaction”. We
RATIONALITY
4
strive to work as equals with our business
partners, dealing fairly and working for our Being reasonable on each
mutual prosperity. other’s expectations

ABILITY DEVELOPMENT

5
AEON and its Shareholders Take ownership of the career
AEON strives to conduct innovative and path and develop it to achieve
sound management practices that result in the desired goals
high returns for its shareholders.

Together with AEON People

AEON has been built by AEON people
through their tireless and innovative efforts.
The future history of AEON will also be
written by AEON people. AEON people are Managing
irreplaceable assets. with respect

Basic Approach to Personnel Making the most of

Creating a corporate environment in which what employees have
human resources can be developed in a to offer by listening to
long term working relationship. Dealing with employees’ aspirations and
personnel based on ability and achievement understanding employees’ feelings
regardless of nationality, age, gender or
status. Our goal is to be recognised as the
friendliest, people-oriented Company to Ensuring work-life-balance at work,
work for in the world. home and community
 AEON CREDIT SERVICE (M) BERHAD
15

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
5-Year Financial Highlights
Investor Information
02 OVERVIEW
16
18
 16

5 -Y E A R F I N A N C I A L H I G H L I G H T S

FYE2021 FYE2020 FYE2019 FYE2018 FYE2017

RM’000 RM’000 RM’000 RM’000 RM’000
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

STATEMENT OF PROFIT OR LOSS

Revenue 1,561,660 1,598,775 1,365,843 1,235,122 1,101,955
Profit before tax 324,907 390,441 472,191 398,335 351,162
Profit after tax 233,957 292,046 354,624 300,057 265,027

STATEMENT OF FINANCIAL POSITION

Assets
Plant and equipment 137,843 141,161 118,676 92,274 62,233
Right-of-use assets 53,535 70,997 - - -
Investments 27,645 48,699 70,604 18,370 19,045
Deferred tax assets 247,816 213,801 153,916 51,813 49,070
Receivables 6,302,925 6,265,390 6,003,628 5,030,204 4,480,990
Total Non-current Assets 6,769,764 6,740,048 6,346,824 5,192,661 4,611,338
Receivables 2,933,121 3,438,731 2,102,151 2,126,095 1,957,713
Other current assets 88,987 123,080 114,350 303,248 635,642
Cash, bank balances and deposits 439,549 132,798 92,429 83,681 73,667
Total Current Assets 3,461,657 3,694,609 2,308,930 2,513,024 2,667,022
Total Assets 10,231,421 10,434,657 8,655,754 7,705,685 7,278,360

Equity
Share capital 584,012 565,448 534,907 508,629 116,012
ICULS equity - 14,107 43,800 68,306 -
Reserves 1,109,180 977,804 920,274 1,004,568 838,975
Equity attributable to ordinary equity holders 1,693,192 1,557,359 1,498,981 1,581,503 954,987
of the Company
Perpetual notes and sukuk 200,000 200,000 376,000 276,000 276,000
Total Equity 1,893,192 1,757,359 1,874,981 1,857,503 1,230,987

Liabilities
Borrowings 6,542,946 5,597,516 5,616,006 3,257,145 4,898,808
Other non-current liabilities 35,801 52,037 1,595 4,717 -
Total Non-current Liabilities 6,578,747 5,649,553 5,617,601 3,261,862 4,898,808
Borrowings 1,119,964 2,600,152 814,006 2,296,974 973,417
Payables, accruals and other current liabilities 639,518 427,593 349,166 289,346 175,148
Total Current Liabilities 1,759,482 3,027,745 1,163,172 2,586,320 1,148,565
Total Liabilities 8,338,229 8,677,298 6,780,773 5,848,182 6,047,373
Total Equity and Liabilities 10,231,421 10,434,657 8,655,754 7,705,685 7,278,360

STATISTICS
Net earnings per share (sen) * 87.67 107.48 133.55 139.23 101.17
Net dividends per ordinary share (sen) 23.11 44.36 42.15 39.86 60.10
Net assets per share (RM) ** 6.63 6.14 5.98 6.37 6.63

Note :-
* Earnings per share has been calculated based on weighted average number of ordinary shares outstanding in the respective year. FYE2017
earnings per share has been restated to reflect the bonus issue and the latest conversion of 3-year, Irredeemable Convertible Unsecured Loan
Stocks to Ordinary Shares
** Net assets per share has been calculated with exclusion of perpetual notes and sukuk.
 17

5 -Y E A R F I N A N C I A L H I G H L I G H T S

Revenue Profit Before Tax Profit After Tax

(RM Million) (RM Million) (RM Million)

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
1,598.78

1,561.66
1,365.84
1,235.12

472.19
1,101.96

354.62
398.34

390.44
351.16

300.06

292.05
324.91

265.03

233.96
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Net Financing Receivables Total Assets Total Equity

(RM Million) (RM Million) (RM Million)
9,704.12

9,236.05
8,105.78

10,434.66
7,156.30

10,231.42

1,893.19
6,438.70

8,655.75

1,874.98
7,705.69

1,857.50

1,757.36
7,278.36

1,230.99

2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Return On Equity Return On Assets Capital Adequacy Ratio

(%) (%) (%)
28.89

22.59

4.33
22.14

4.01
3.96
17.96

25.14
3.06

23.98
22.39
13.77

19.54
2.26

18.87

2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
 18

I N V E S T O R I N F O R M AT I O N

SHARE PRICE
AEON CREDIT (AEONCR) SHARE PRICE VS. FBM KLCI
(1 MARCH 2020 TO 28 FEBRUARY 2021)
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

20.00 FBM KLCI (Point) 1800

19.00 Highest -1,684.58

1700
18.00

17.00
1600
AEON CREDIT SHARE PRICE (RM)

16.00 AEONCR (RM)

FBM KLCI (point)

15.00 Highest -14.00 1500

14.00
1400 Share Price
13.00
KLCI
12.00 1300
11.00
1200
10.00

9.00
1100
8.00

7.00 1000
Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21

AEONCR FBM KLCI

AEONCR
(RM) (Point) FBM KLCI
Highest 14.00 1,684.58
Lowest 7.86 1,219.72

AEON CREDIT (AEONCR) SHARE PRICE MOVEMENT VS. FBM KLCI MOVEMENT
(1 MARCH 2020 TO 28 FEBRUARY 2021)

130%
FBM KLCI (Point)
Highest -115%
PERCENTAGE MOVEMENT FOR FYE2021

120%
AEONCR (RM)
110% Highest -100%

100%

90% AEON Credit

KLCI
80%

70%

60%

50%
Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21

AEONCR FBM KLCI

AEONCR
Highest 100% 115% FBM KLCI
Lowest 56% 83%
 19

I N V E S T O R I N F O R M AT I O N

INVESTOR RELATIONS The CCO, CFO and IR team have participated in various
conference calls in FYE2021 to brief investors on the
The global economic upheaval sparked by the COVID-19 Company’s strategic plan and update on financial
pandemic poses unprecedented challenges and performance. Due to the pandemic containment measures
uncertainties to the business environment. In this time of that include re-imposition of Movement Control Order
uncertainty, the Company values the support of investors (“MCO”), one-on-one and small group virtual meetings

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
and the significant role of investors to realizing the were conducted periodically to ensure a high level of
Company’s growth plans. An effective investor relations investor engagement during the year. Nevertheless, the
programme has been developed to bridge the flow of scarcity of meetings translated to greater interest as we
information that is critical to the investment community. reached 306 no. of participants including fund managers,
Focus on the use of technology to maintain effective bankers, researchers and analysts in FYE2021 versus 186
two-way communications between the Company and the the year before. We maintained as strong an engagement
investment community in the time of crisis. AEON Credit as possible with stakeholders while continuing to utilise
has a dedicated investor relations team (“IR team”) which the share register analysis to identify and earmark
is led by the Chief Corporate Officer (“CCO”) and Chief stakeholders who needed to be engaged.
Financial Officer (“CFO”) that constantly relays feedback
to the Senior Management and Board of Directors. The Research Coverage
Company provides timely, accurate and transparent picture
of the Company’s key strategy and financial performance The Company covered by the investment community and
to investors via multiple communications platform. The the stock had active coverage by a total of 7 research
Management devotes time to conduct conference calls houses and continues to be tracked by buy-side analysts
with investors, as well as maintaining a comprehensive and fund managers domestically and globally.
and up-to-date investor relations website.
No Research House
INVESTOR RELATIONS EVENT FYE2021
1 Affin Hwang Investment Bank Bhd
Analyst Briefings 2 AllianceDBS Research Sdn Bhd

AEON Credit has conducted analyst briefings on quarterly 3 CLSA Securities Malaysia Sdn Bhd
basis on the Company’s financial performance and
4 KAF Seagroatt & Campbell Securities Sdn Bhd
strategic focus areas of the Company. CFO presented
the quarterly and annual financial performances and took 5 Kenanga Investment Bank Bhd
questions for more detailed discussion and explanation.
6 MIDF Amanah Investment Bank Bhd
CCO and IR team were on hand to take on more business-
specific and operational queries. It is the IR team’s 7 RHB Investment Bank Bhd
responsibility to ensure that the financial statements are
timely lodged with the Bursa Securities.

Date Event Venue

26 Jun 20 AEON Credit Q1FYE21 VE Hotel &
Analyst Briefing Residence

30 Sep 20 AEON Credit Q2FYE21 VE Hotel &

Analyst Briefing Residence
22 Dec 20 AEON Credit Q3FYE21 Conference Call
Analyst Briefing

09 Apr 21 AEON Credit Q4FYE21 Conference Call

Analyst Briefing
 AEON CREDIT SERVICE (M) BERHAD
20
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
 21

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
03 REFLECTIONS FROM
TOP LEADERSHIP
22 Chairman’s Statement
26 Management Discussion and
Analysis
 22

C H A I R M A N ’ S S TAT E M E N T

On behalf of the Board of Directors

(“the Board”) of AEON Credit, I am
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

pleased to present the Integrated

Annual Report and Audited Financial
Statements for the financial year
ended 28 February 2021 (“FYE2021”).

It has been a tumultuous and challenging year and AEON

Credit needed to contend with the occasion. We remained
steadfast in our management philosophy of supporting our
customers’ lifestyles to enable future opportunities through
effective use of credit, while our short term focus was on
the provision of financial relief, as well as to ensure the
safety of both our customers and employees. FYE2021
was a year of sustaining the internal drive to ensure the
Company maintained a healthy asset quality needed
to overcome the impact of the pandemic and ensure
agile actions were taken towards recovery of business
operations.

The Company’s strategic focus remains unwavering

in ensuring recovery and growth, by embarking on
counteractions against the impact of COVID-19, which
were focused on cost management, asset quality
enhancement and customer support.

NG ENG KIAT
Chairman
 23

C H A I R M A N ’ S S TAT E M E N T

These initiatives included identification of critical business

RESPONDING TO COVID-19
operations to work at the office, switching to work from
ENVIRONMENT home (“WFH”) arrangements for other supporting
functions, adoption of virtual meeting platforms, provision
The COVID-19 pandemic that hit Malaysia in 2020 was of Personal Protection Equipment (“PPE”), weekly
an unprecedented global event. What began as a health sanitisation of the workplace and implementing rules

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
crisis quickly became an economic crisis that had an all- for physical distancing to further safeguard both our
encompassing impact to the way we lived. AEON Credit was employees and customers.
also affected by the impact it was having on our customers,
employees, business operations and business partners. Additional steps were also carried out to ensure that our
employees were safe such as conducting a mandatory mass
This pandemic posed the biggest challenge that the COVID-19 swab test, compulsory daily self-health declarations,
Management has had to overcome. It is fortunate that the vast mandatory self-temperature checks and MySejahtera
experience, expertise and support from the Senior Management registrations were implemented for all employees and visitors.
and employees backed by invaluable guidance from the AEON
Financial Service Co., Ltd. (“AFS”), Japan have helped us to In light of the headwinds, the Company remains resolute
navigate this challenging and unchartered path while remaining in its efforts to preserve sufficient liquidity to meet its
resilient. continuing financial obligations and strengthen its financial
resilience amidst this incredibly challenging period.
Although it had been a long and difficult road for all, Malaysians
were aided by the various economic and financial assistance
programmes made available by the Government and the COMMUNITY SERVICE
financial sectors. AEON Credit voluntarily participated in the
Government’s call for financial relief assistance plans to aid
in the economic sustenance of our customers and to fulfil our Amidst an environment of restricted movement and social
community sustainability obligations by offering a 2-months distancing, community based programmes were carried
automatic loan moratorium for easy payment and personal out by the Malaysian AEON Foundation (“MAF”) to assist
financing products to our customers. A total of 883,000 the country’s frontliners and those in need. Our focus on
customers have benefited from these assistance programmes. corporate sustainability as a key guiding pillar remains
Subsequently, the Company introduced further assistance steadfast during these challenging times.
such as the AEON Relief Programme (“ARP”), conversion of
credit card balances into instalments and other Refinancing AEON Credit contributed to several different community
and Restructuring programmes to help alleviate the financial groups that were badly affected by the pandemic by
burden faced by our customers during the pandemic. donating food and hygiene essentials to the medical
frontliners at several hospitals in Malaysia. Food packs
As the world grappled with the new norms, AEON Credit were distributed to district police offices and medical
managed to quickly adapt to ensure that our customers could frontliners at the city centre, whilst underprivileged families
continue to utilise our services whilst protecting our employees’ and orphans, benefited from AEON Member Plus Visa
safety and ensuring the continuity of our business operations. Card reloads, Christmas gifts and new attire during the
festive seasons. In collaboration with the AEON Group of
In compliance with the National Security Council (“NSC”)’s Companies, the Company provided Flood Disaster Relief
Standard Operating Procedures at workplace and to deliver for several hundred affected families and relief centres
our commitment towards our employees’ safety and welfare as with essential food items and personal hygiene care.
utmost priority, all the necessary initiatives were implemented
throughout the Movement Control Order (“MCO”) since it was The Company is committed to long-term sustainability,
introduced in March 2020, to protect not only our employees’ especially in the areas of excellent customer experience,
physical health, but also to mitigate their economic, financial, financial and IT governance, employee recognition and
mental and emotional state. engagement as well as energy conservation.

AEON Credit is indeed very glad to state that there were no The full details of these are set out in the Sustainability
salary reductions or employee retrenchment conducted to Statement of this Integrated Annual Report.
date. However, the Company relied on natural attrition for cost
optimisation. On top of that, the Company managed to provide
a bonus pay-out and early salary remittances during festive
seasons to provide financial relief to our employees whose
families were affected by the pandemic.

Operationally, the Company had implemented several initiatives

to ensure the seamless continuity of our business.
 24

C H A I R M A N ’ S S TAT E M E N T

REWARDING SHAREHOLDERS THROUGH SUSTAINABILITY STATEMENT

DIVIDEND RETURNS

We continue to maintain a reasonable return to our The ability of AEON Credit to navigate this challenging
shareholders with total dividend declaration of 29.2 sen year is mainly due to our strong foundation in good
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

per share for FYE2021, translating to a dividend payout Corporate Governance and Risk Management, as well as
ratio of 31.9% despite a decline in net profit. The Company our belief in people.
has paid an interim dividend of 9.20 sen per share and has
recommended a final dividend of 20.0 sen per share which Although the Company had only in the recent few years
is subject to the shareholders’ approval at the forthcoming embarked on promoting sustainability via the incorporation
Annual General Meeting (“AGM”). of Environmental, Social and Governance (“ESG”)
principles, these principles have aided in the Company
persevering during this tumultuous year of challenges.
FINANCIAL PERFORMANCE AEON Credit’s sustainability pillars encompass conduct
and trust, customer experience, digital product and
service transformation, employee health, safety and well-
The pandemic which hit the world unexpectedly had being, environmental stewardship and contributing to
negatively affected the Company’s financial performance communities.
for the FYE2021, resulting in lower revenue in line with
weaker transaction and financing volume. The Company These sustainability pillars have kept the Company afloat
saw its profit after tax dip from RM292.05 million in FYE2020 and preserved our employees’ livelihood, which despite the
to RM233.96 million mainly due to increase in impairment imposition of the MCO and an economically challenging
loss on financing receivables of RM58.11 million which period, we have been able to maintain our workforce and
was partly offset by lower operating expenses. continue serving our customers, and also maintaining a
reasonably healthy return for our stakeholders.
Further details of the Company’s financial performance
are set out in the Management Discussion and Analysis
section of this Integrated Annual Report.
 25

C H A I R M A N ’ S S TAT E M E N T

OUTLOOK AND PROSPECTS APPRECIATION AND

ACKNOWLEDGEMENTS

The domestic economy is expected to recover in year 2021 On behalf of the Board, I wish to take this opportunity
supported by the rebound in global demand, turnaround to express my sincere gratitude to our customers,

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
in public and private sector expenditure and the rollout shareholders, business partners and regulators for their
of COVID-19 vaccines to achieve herd immunity. The unwavering support and confidence in the Company,
Company will continue to closely monitor and assess the throughout a challenging year.
inherent credit risks in its financing portfolio, with proactive
attention focused on enhancement of asset quality, Our success has in part, been made possible by holding on
prudent cost management and improvement on financial to our management philosophy, “To support our customers
and operational efficiencies. lifestyle and enable each individual to maximise future
opportunities through effective and use of credit.”
The Company remains committed to strive in building
business sustainability by investing in information Over the years, serving our customers financial needs and
technology to further transform its capacity in digitalisation improving their lives, has allowed AEON Credit to thrive
especially in the areas of B2C2B transformation, artificial as a business. This achievement would not have been
intelligence, robotics and quicker processing. possible had it not been for the dedicated contribution of
our frontliners, who had adapted quickly to the new norm
We will continue to promote cashless transactions, and contributed to ensure the Company’s projects were
enhance the features of the AEON Wallet, and integrate delivered and completed efficiently. We will continuously
the database across the AEON Group of Companies strive to bring added value to our society in our quest to
to optimise the potential of data analytics in product achieve excellence in what we do.
offerings and cross-selling. Whilst digitalisation projects
are underway, current efforts are focused on customising The Board also wishes to convey its utmost appreciation to
strategies based on regions, in order to enable more agile Mr Yuro Kisaka, our Managing Director, who will retire after
decision making and the capturing of customers’ current the conclusion of the 24th AGM, for his tireless dedication
and expected needs. during his tenure of service in Malaysia. His bold and
strategic initiatives coupled with his resolute stewardship
of AEON Credit has well-positioned the Company to move
TRANSFORMATION FROM FINANCIAL
forward with renewed purpose in the current challenging
SERVICE TO COMPREHENSIVE SERVICE times.

The financial industry as a whole is already gearing Dato’ Md Kamal bin Ismaun and Mr Masaaki Mangetsu
towards moving into both banking and non-banking who will be retiring at the 24th AGM have also indicated that
business activities which will allow participants to leverage they are not seeking re-election. I would like to express
their vast consumer base, by offering new products and my sincere gratitude for their wise counsel and invaluable
services to fit customer needs. contributions all this time.

AEON Credit plans to strategically shift from a financial We will certainly miss all these fine gentlemen on our
service company to a comprehensive service company in Board.
a bid to serve our customers better.
Finally, I also wish to extend my heartfelt thanks to the
To some extent, we have been offering these services by Management team and our dedicated employees for their
expanding our credit line to the mode of vehicle financing, continued diligence, untiring efforts and sacrifices.
enabling our customers to acquire their own transportation,
empowering them to become an income earner, or pursue
educational certifications, which in turn will improve their Thank you.
personal and economic standing.

Insurance alliances have also enabled us to combine the NG ENG KIAT

health and wellness business to provide new products and Chairman
services, to our existing and new customers.
 26

M A N A G E M E N T D I S C U S S I O N A N D A N A LY S I S
OPERATING ENVIRONMENT

The AEON DNA has driven AEON Credit to constantly

take on new challenges, with continuous innovation taking
forefront in everything that we do. The AEON DNA can be
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

YURO KISAKA historically traced back to the ‘spirit of peddler’ upheld since
Managing Director 1758 as a key feature of our strategy. It simply translates
into the will to constantly move like the peddler, be it to find
business opportunities or customers, where their features,
needs and wants changes in accordance to customers life
stages and surrounding circumstances.

This need to always move and keep up with changes

surrounding us, to continuously adapt to customers’ needs
and the ever-changing business landscape, had served
the Company well, especially with the COVID-19 pandemic
situation. The pandemic situation had required innovation
for online transactions due to movement restrictions. In
meeting this demand, the Company is speeding up its
digital transformation to increase sales via digital platforms.
During the MCO imposition, the Company ceased customer-
facing and other frontline operations across its entire branch
network and this directly impacted its business. With this
transformation, we will be able to connect with customers
directly, proactively offer personalised solutions, while
simplifying and automating operational processes and
improve efficiency. Through the digital transformation, AEON
Credit would be able to enhance customers’ experience,
generate incremental revenue opportunities and improve
operational efficiency. For the second-half of FYE2021,
we have also reviewed our Company structure and follow
through our medium-term growth strategy by replacing our
core system with a new system to boost efficiency and
productivity. We are also pursuing cashless transactions
through our AEON Wallet.

RESPONDING TO COVID-19

The outbreak of COVID-19 highlights the need for immediate

action to reduce the health and economic impact of the
pandemic, protect vulnerable groups and set the stage for
a sustained recovery. Recognising that some customers
were severely impacted by the pandemic, AEON Credit had
decided to offer a two-month (2) payment holiday program for
Easy Payment and Personal Financing products, to a total
of 883,000 eligible customers, effective from 1 April 2020.
The AEON Relief Programme (“ARP”) which was offered
in May 2020 with 96% of customers paying the arrears by
September 2020, was supported by 584 employees from
different departments working together to implement it.

The Company had also extended a Moratorium Scheme

to the retrenched and those who suffered from pay-
cuts. Although this program ended in March 2021, the
Company continued to offer Refinancing or Restructuring
scheme to customers who are still facing repayment
challenges. In total the Company has offered RM690
million worth of relief packages to 426,000 customers. A
simplified process has been established to facilitate those
applying for this assistance, with approval provided within
24 hours and disbursement within five days of approval.
 27

M A N A G E M E N T D I S C U S S I O N A N D A N A LY S I S

Our employees are the Company’s principal asset. With this .

in mind, AEON Credit had taken the necessary precautionary STATEMENT OF FINANCIAL POSITION
actions to safeguard the well-being of employees and
minimise exposure to the virus. The full details of these
counter measures are provided in the Sustainability Throughout the pandemic and MCO, AEON Credit has
Statement of this Integrated Annual Report. implemented strategic plans to adapt to the prevalent

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
economic uncertainties. The Company recorded an increase
of total equity to RM1,893.19 million and net asset value per
FINANCIAL PERFORMANCE share stood at RM6.63, highest in past 3 years.

The Company continues to closely monitor the asset

Overall, Malaysian Gross Domestic Product (“GDP”) portfolio by customer segment to strengthen its asset
contracted 5.6% in 2020, compared to a growth of 4.3% quality. As at 28 February 2021, gross financing receivables
recorded in year 2019. Malaysia was affected by the decreased by 3.0% to RM10,078.16 million as compared to
MCO and with the implementation of Standard Operating the RM10,394.66 million recorded in the previous year. Non-
Procedures (“SOPs”), comprising widespread containment performing loans (“NPL”) ratio as at end FYE2021 stood at
measures, international border closures, leading to the 2.46%.
weak external demand environment, constrained domestic
economic activities, resulting in a considerably reduced The Company’s capital adequacy ratio (“CAR”) escalated
production and spending and weakened labour market to 24.0% in FYE2021 from 18.9% in FYE2020, the strong
conditions. Fiscal stimulus measures, alongside monetary capital position provides ample headroom for growth in the
and financial measures, however, provided some temporary future. The Company recorded a Return on Equity (“ROE”)
support to the economy. Higher unemployment rate was and Return on Asset (“ROA”) of 13.8% and 2.3% respectively.
evident, especially in the hospitality-related industries, Debt-to-equity ratio improved from 4.6 times to 3.8 times.
standing at 4.8% (0.77 million) in December 2020.

Accordingly, AEON Credit’s business operations in FYE2021 OPERATIONAL REVIEW

reflected the abovementioned challenges, which impacted
our overall financial performance. In light of all these, AEON
Credit registered a revenue of RM1,561.66 million for the Easy Payment and Personal Financing Business
FYE2021, a 2.3% decline year-on-year (“YOY”) (FYE2020:
RM1,598.78 million) mainly due to lower income in line with Easy Payment and Personal Financing schemes recorded
weaker transaction and financing volume during the year, with RM2,604.52 million in financing volume for FYE2021, decline
business activities being disrupted during various MCOs. Total by 41.7% from RM4,466.12 million in financial year 2020 as
transaction and financing (“T&F”) volume for the year declined the business activities were impeded by the enforced closure
33.7% from RM6,380.98 million to RM4,228.76 million. of merchant premises and Customer Support Unit operation
during MCO. Motorcycle Financing remains as a key driver
Profit before tax (“PBT”) was recorded at RM324.91 million to financing volume with 33.3% share in portfolio.
(FYE2020: RM390.44 million), 16.8% lower compared to
the previous financial year. The decrease was mainly due To enhance asset quality, the Company had during the year
to lower revenue and incrementally higher impairment revised its product strategy and tightened credit policies for
losses on financing receivables of RM58.11 million all its product offerings in response to the imposition of MCO
occasioned by the effects of COVID-19 pandemic. However, and market impediments. With effective collection strategies
the decrease in PBT was mitigated by lower operating and reactivation of the economy, the Company’s business
expenses of RM62.98 million. The incrementally higher activities gradually recovered in the second half year 2020.
allowances for impairment losses took into consideration
the need to anticipate a deterioration in asset quality Expansion of core businesses continues to be our main
due to the negative effects of the continuing pandemic. priorities where we focus on products with better profitability
by reviewing the market and industry potentials, customer
Correspondingly, the Company recorded a lower segments and geographical inputs.
Profit after tax (“PAT”) of RM233.96 million (FYE2020:
RM292.05 million). However, we have recorded an Card Business
improvement on cost efficiency due to prudent cost
management initiatives, contributed by lower personnel, In FYE2021, credit card transactions declined by 19.2% from
advertisement and promotion expenses, with our cost-to- RM1,827.25 million to RM1,476.23 million, impacted by the
income ratio excluding impairment loss standing at 30.2%. imposition of MCOs. However, acquiring transactions within
AEON Group of Companies have increased to RM1,524.16
million, 347.7% against last year with AEON Credit terminals
being prioritised for card payment acceptance. E-money
transactions volume grew by 68.9% to RM148.01 million as
compared to RM87.61 million in FYE2020.
 28

M A N A G E M E N T D I S C U S S I O N A N D A N A LY S I S

AEON Credit positions AEON Cards as an everyday card for

DECENTRALISING OPERATIONAL
cardholders with product differentiation created leveraging
on AEON Group of Companies. Apart from that, AEON Wallet
EFFICIENCY
with the QR payment feature provides AEON Cardholders
a cardless payment experience and faster checkout at A Regionalisation Strategy was established and designed
cashiers by enabling their AEON Wallets to perform payment to shift our focus from a product-based organisation to a
I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD

and accumulate AEON Points through the app. customer-focused organisation to support customers’ needs
and also streamline operation for cost efficiency.
Under the AEON Member Switch Over Program, various
campaigns have been launched to convert the AEON Card AEON Credit’s initial regionalisation activity was to localise
members to AEON Member Plus Visa Card members which our marketing strategy by states in order to better facilitate
provide card members with more benefits inclusive of higher the business expansion for potential untapped markets and
rewards and exclusive deals. To date, 1.05 million AEON customise our product offerings. This move is essentially
Card members have converted to the AEON Member Plus aimed at capturing new market segments, in accordance with
Visa card. As at FYE2021, we have a total 2.24 million AEON their localised customers’ unique requirements and enabling
Cards in circulation and 1.0 million AEON Wallet downloads. swift customisation of our product offerings.

AEON Credit had also reorganised its regional telemarketing

centre by reallocating the required resources to strategic
hubs, based on proximity, profitability and services provided.
Manpower rationalisation allows the Regional Telemarketing
Unit to expand laterally and form regional hubs, ensuring a fall-
back operations centre in case of down-time, with centralised
performance monitoring and growth strategy plans.

Branch Cash Deposit Machine (“CDM”) network revision

strategies and payment channels enhancement via merchant
networks under the branch rationalisation strategy leverage
on digital shift to gradually reduce the number of branches
and CDM, a total of 5 branches and 1 kiosk had been closed
as at February 2021.
TECHNOLOGY INNOVATION AND
DIGITALISATION
PURSUIT OF SUSTAINABILITY

Malaysia is becoming an important market for fintech growth,

driven by infrastructure development catering to the high
penetration in mobile and internet services amongst the
population. Malaysian Communications and Multimedia
Commission (“MCMC”) data shows that Malaysia’s mobile
penetration is over 130% and an internet broadband
penetration of over 120% in year 2020.

In line with this growth, AEON Credit had prioritised initiatives

in speeding up our digitalisation efforts, allowing for instant
and faster processing of our customers product approvals,
which in turn created a new demand to further improve
user experience and operational efficiency. In FYE2021,
the Company successfully implemented digital onboarding
and improved transaction processing turnaround time by
automating application processes, resulting in seamless In order to manage and attain our sustainability goals in
customer experience and improved operational efficiency. the organisation, AEON Credit’s Board Risk Committee
(“BRC”) continues to support the sustainability agenda and
AEON Credit is also looking at replacing its Core System practices in the Company. The BRC oversees all principal
which is aimed at enhancing operational efficiency. businesses, financial, strategic and operational risks, driving
risk management efforts organisation wide, as well as
sustainability related matters including reviewing the overall
sustainability plans, objectives and its performance.
 29

M A N A G E M E N T D I S C U S S I O N A N D A N A LY S I S

In compliance with the Malaysian Anti-Corruption

Commission Act 2009, the Company is committed to conduct ACKNOWLEDGEMENTS
its corporate and social activities with integrity, sincerity and
ethically by adopting a zero tolerance of all forms of bribery.
The Company provides appropriate anti-bribery awareness I would like to take this opportunity to acknowledge and
and training on the Policy and the duty for all personnel to express my sincere gratitude for all the hard work and

I N T E G R AT E D A N N U A L R E P O R T 2 0 2 1
AEON CREDIT SERVICE (M) BERHAD
comply, on a regular basis, as appropriate in their roles. contributions by our employees during the course of this
The Company’s Management team and employees had year. Without their dedication and adaptability throughout
undergone the anti-corruption training either through physical the years, we would not be where we are today and for that,
or online platforms. All employees are expected to lodge a my sincerest and most heartfelt appreciation to all of them.
report on any bribery case immediately to the Management
via our whistle blowing channel, to avoid reputational My utmost appreciation to the Board of Directors for their
damage and loss of business confidence. Risk Assessment wise counsel and stewardship. FYE2021 has indeed been
on Anti-Bribery is conducted annually and covers all business an unprecedented year and one that we would not have
operation in terms of business engagement with customers, managed to temper, without the leadership, passion, drive
business associates and regulators. The Company also and perseverance of our esteemed Board of Directors and
adheres to Integrated Management System (“IMS”) which the Management team.
is a combination of common elements of ISO 9001:2015
Quality Management System (“QMS”), ISO/IEC 27001:2013 Finally, to all our customers, my heartfelt thanks for your
Information Security Management System (“ISMS”) and ISO continued trust and loyalty to us. My utmost gratitude also
14001:2015 Environmental Management System (“EMS”) to all our business partners, shareholders and all other
into one coherent system to facilitate management and stakeholders who have braved the tide with us and continue
oversight, especially during the COVID-19 pandemic. to support AEON Credit throughout the years. A special
tribute to all frontliners across the nation who have shown
The full details of these and other sustainability and great dedication and commitment to keeping our nation safe
governance highlights are provided in the Sustainability and connected.
Statement of this Integrated Annual Report.
.

OUTLOOK AND PROSPECTS Yours sincerely,

In 2021, the Malaysian economy is projected to grow between YURO KISAKA

6.5% and 7.5%, driven partly by anticipated improved global Managing Director
economic outlook, strong economic fundamentals and a
well-diversified economy. The Malaysian Government had
launched various economic stimulus packages to boost
economic growth while continuing to manage the health
crisis, safety of the people, address household needs and
businesses adversely affected by the COVID-19 pandemic.
However, the favourable outlook hinges on two major factors
– the successful containment of the pandemic and sustained
recovery in external demand.

Amid the market volatility arising from the impact of the

pandemic, the Company will continue to provide support to
our targeted customer needs while setting a solid foundation
for growth opportunity post COVID-19. AEON Credit had
accelerated our digital transformation to provide a seamless
customer experience and safety of stakeholders through
a digital onboarding platform. Moving forward, enhanced
risk management, prudent cost optimisation and expansion
of core businesses will remain our main priorities to drive
efficient growth.