AEON Credit profit rises 10.8% to $33m in H1

This is thanks to a higher interest income and improved credit risk management.

Hong Kong-listed AEON Credit Service (Asia) Company Limited reported a 10.8% increase in profit after tax to $33.0m (HK$258.8m) for the first half ended 31 August, supported by higher interest income and improved credit risk management.

Revenue rose 7.2% to $122.5m (HK$961.4m), from $114.3m (HK$897.1m) a year earlier, whilst interest income increased by $8.5m (HK$66.9m) to $104.6m (HK$821.3m), mainly due to growth in credit card receivables.

Net interest income grew 9.5% to $97.5m (HK$765.1m) as the group maintained its average cost of funds at 3.4%.

AEON Credit attributed the stable funding cost to its diversified borrowing portfolio across different rates and maturities.

Operating profit before impairment losses and allowances increased 7.4% to $65.1m (HK$510.7m), from $60.6m (HK$475.6m) previously.

The operating expenses-to-operating income ratio remained broadly stable at 44.0%, compared with 43.8%.

Meanwhile, impairment losses and allowances as a proportion of revenue fell to 22.0% from 23.0%, which the group said demonstrated the effectiveness of its credit risk management.

Earnings per share increased to 7.87 US cents (61.81 HK cents) from 7.11 US cents (55.78 HK cents).

The board declared an interim dividend of 3.57 US cents (28.0 HK cents) per share, up from 3.18 US cents (25.0 HK cents) a year earlier, representing a 45.3% payout ratio.

AEON Credit also expanded its personal loan offering during the period, launching renovation loans and personal loans for property owners in May.

The group said the products received a positive market response and were intended to diversify its customer base.

The group expanded loan drawdown channels through its AEON HK mobile app, using electronic know-your-customer processes, data analytics, and automated credit assessment to streamline applications through approval and drawdown.

Its branch network continued to complement digital channels by providing one-stop financial services and face-to-face consultations, with opportunities for customer acquisition and cross-selling.

For its credit card business, targeted campaigns covering local spending, overseas transactions and merchant purchases supported card usage and customer engagement.

Looking ahead, AEON Credit said artificial intelligence (AI) and the development of its AEON Ecosystem will remain key parts of its strategy for the second half of FY2026/27.

The group plans to further explore AI applications in credit assessment, fraud detection, customer service, and back-office operations.

In September, it launched a revised credit card application scoring model using external credit bureau data and internal repayment behaviour data.

The group plans to extend the scoring capabilities to its personal loan business in the second half of FY2026/27 to improve risk differentiation and credit assessment efficiency.

AEON Credit also expects to launch a unified bonus points programme during the second half of the financial year.

The programme, under its AEON EcoZone, will allow customers to earn and redeem points across AEON Stores (Hong Kong) and participating merchant partners.

Wei Aiguo, Managing Director of AEON Credit, said the group would continue to focus on receivables growth, customer relationships and operational efficiency whilst maintaining asset quality.

(US$1 = HK$7.85)