AMMB's Q1 net profit up 5.9% to RM347.6m

PETALING JAYA: AMMB Holdings Bhd's net profit rose 5.9% to RM347.6 million in the first quarter ended June 30, 2018 (Q1FY19) from RM328.27 million in the previous corresponding quarter, driven by higher interest income.
Revenue for the quarter grew 4.4% to RM2.17 billion againts the RM2.08 billion made previously.
The group's net interest margin (NIM) remained flat at 2.02% compared with the corresponding period last year.
Its total operating expenses recorded reduction of 7.3% compared to same period last year, while general and administrative expenses were controlled with less expenses incurred relating to compliance and governance.
Overall, the group's cost to income (CTI) ratio improved to 50.6% from 56.3% a year ago. Its net income from insurance business also improved substantially mainly due to lower insurance claims.
"We saw a strong pre-provision profit growth of 16.7% compared to 3.2% in Q1FY18. At RM501 million, this is the highest profit before provision (PBP) recorded since Q4FY15, a testament to the strength of our Top 4 strategy," AmBank Group CEO Datuk Sulaiman Mohd Tahir said in a statement.
"Credit costs were still negligible considering our asset base. Overall, we recorded higher profitability and improved returns in Q1FY19," Sulaiman said.
He added the bank's net interest income (NII) continued to grow steadily at 4.7% year-on-year (y-o-y) to RM642 million, paced by the consistent loans growth of 2.2% on a year-to date (YTD) basis.
However, he said non-interest income (NoII) was flat y-o-y at RM372 million.
On loans growth, Sulaiman said AMMB continues to see good loans growth in its targeted segments.
He said mortgage loans maintained its growth momentum and expanded by 4.8% YTD to RM27.7 billion, while loans to small and medium enterprises (SME) grew 2.8% YTD to RM17.2 billion.
"All in all, we are encouraged by the 8th consecutive quarter of loans growth. Our customer deposits grew 2.9% YTD to RM98.6 billion whilst our current accounts and savings accounts (CASA) increased by 2.1% YTD," he added.
On liquidity, Sulaiman said the group's banking subsidiaries have maintained liquidity coverage and net stable funding ratios (NSFR4 ) above 100%.
"Our capital levels were adequate with CET1 capital ratio at 11.6%, up 30 basis points (bps) from March 31, 2018 whilst total capital ratio stood at 16.4%, down 20 bps," he noted.
On its prospects, Sulaiman said the group is on track to achieve its full year CTI target of 55%.
"We will continue to maintain our focus on driving income and CASA growth as well as manage cost diligently through our BET300 programme to attain operational efficiencies while emphasising capital accretive growth," he added.
At the midday break, AMMB's share price gained 7 sen or 1.8% to RM3.93 with 243,000 shares changing hands.