Ambank earnings fall in Q3 on higher operating expenses and provisions

PETALING JAYA: AMMB Holdings Bhd’s reported a net profit of RM218.97 million in the third quarter ended December 31,2017, 30% lower than the RM313.16 million reported a year ago due to higher operating expenses and impaired loans.
Revenue for the quarter under review grew 9.18% to RM2.15 billion from RM1.97 billion in the previous year’s corresponding quarter.
“Net Interest Income will continue to drive our top line growth with mortgage, small and medium enterprises (SME), credit card loans maintaining their growth momentum. Non Interest Income (NOII) from investment banking and money market activities may still be lumpy but wealth management, corporate and commercial banking will continue to propel NOII. We expect credit cost to continue to normalise for us with reduced recoveries relative to FY17 as impairment allowances are expected to commensurate with our loans growth. We will continue to manage our funding mix, grow current accounts and savings accounts and diversify our portfolio for sustainable NIMs. Our capital position is constantly being assessed and we continuously strive to improve its efficiency.” said AmBank group CEO, Datuk Sulaiman Mohd Tahir in a statement.
Net interest margin (NIM) was broadly stable year-on-year at 1.98%.
Deposits from customers increased RM6.0 billion or 6.4% year-to-date (YTD) to RM99.9 billion. This was predominantly driven by the diversification of our customer base to enhance funding resiliency. Current accounts and savings accounts (Casa) which collectively make up lower cost deposits, expanded by 0.8% YTD. Casa composition is at 20.0% due to its enlarged deposit base.
Sulaiman added that a mutual separation scheme (MSS) offered in January 2018 will allow them to further optimise the group’s organisational structure, which will in the long run, translate into greater savings and efficiency.
Since March 31, 2017, gross loans and financing grew 4.1% to RM94.7 billion with mortgages growing 15.2% and SME loans growing at 12.4%.
For the cumulative period of nine months, the group’s net profit stood at RM878.71 million, 1.13% lower than the RM988.79 million reported in the first three quarters of the previous year due to higher impairment which was partially offset by higher income.
Revenue grew slightly by 3.66% to RM6.36 billion for the nine month period ended Dec 31, 2017, from RM6.14 billion for the same period in 2016.
The stock fell 25 sen to RM4.29 with some 5.4 million shares changing hands.