KUALA LUMPUR (June 12): A reorganisation of Affin Bank Bhd’s (KL:AFFIN) newly acquired asset management business, Pheim Asset Management Sdn Bhd, is underway, with the lender expected to appoint industry veteran Doreen Choo as the latter’s CEO, industry sources said.

“We hear the appointment is pending the Securities Commission Malaysia’s approval,” one of the sources told The Edge.

Choo is expected to take over from Pheim’s current CEO Lee Ta Wei, who had also held the role of chief investment officer (CIO). It is understood that Lee will remain as the company’s CIO.

Choo was formerly CIO of Eastspring Investments Bhd, a role she had held for six-and-a-half years until February 2025. Before that, she spent nearly 14 years at CIMB-Principal Asset Management Bhd (now known as Principal Asset Management Bhd), where she last served as head of equities for Malaysia.

Meanwhile, Pheim founder Tan Chong Koay, who was its executive chairman prior to the acquisition by Affin Bank, is expected to remain in an advisory capacity to the bank’s president and group CEO Datuk Wan Razly Abdullah Wan Ali, sources said.

Affin Bank declined comment when contacted.

The reorganisation comes as the bank looks to ramp up its wealth management capabilities and boost fee-based income.

The lender completed its RM50 million cash acquisition of Pheim on April 22, which marked its re-entry into the asset management space.

It had previously held a 63% stake in Affin Hwang Asset Management Bhd (AHAM), but sold it for a hefty RM1.2 billion in July 2022 as it needed capital to grow the bank’s business further.

In an interview with The Edge last month, Wan Razly said that the bank plans to rebrand Pheim as Affin Pheim Asset Management

He said, unlike its previous asset management venture, Affin Pheim will operate as a wholly-owned subsidiary directly under the bank, enabling the lender to strengthen its wealth management proposition. Previously, AHAM was held under the bank’s investment banking arm, Affin Hwang Investment Bank Bhd.

According to Wan Razly, Affin Pheim should be able to grow its assets under management to RM6 billion within three years, from roughly RM833 million as at end-March, by leveraging the bank’s distribution network and customer base.

Even so, Affin Pheim will be a relatively small player in the business when compared with market leaders Public Mutual Bhd and Principal Asset Management Bhd.

Analysts have noted that the new asset management venture will help Affin Bank build up its fee income while reducing its reliance on lending income amid continued pressure on net interest margins (NIM).

“However, competition will be stiff as almost all banks are also looking to build up their wealth management business as funding cost pressures remain a challenge,” a banking analyst told The Edge.

After two straight years of NIM declines, Affin Bank managed to grow its NIM by 11 basis points (bps) to 1.45% last year, despite a 25bps cut in the overnight policy rate in July, as the lender pursued CASA (current account and savings account) deposits — a cheaper source of funds — more aggressively.

This year, it is targeting a higher NIM of 1.55% and an improved CASA ratio of 30%, up from 24.96%.

The bank recently reported a 9% year-on-year rise in net profit to RM135.5 million for the first quarter of the financial year ending Dec 31, 2026 (1QY2026), helped by a surge in non-interest income and better interest income.

Affin Bank’s stock has risen a marginal 0.4% this year to close at RM2.28 on Thursday (June 11), giving the bank a market capitalisation of RM5.78 billion.

Bloomberg data shows four analysts with “buy” calls and six with “hold” calls — with no “sell” ratings — and a 12-month average target price of RM2.77, which suggests further upside.