AMMB Q3 earnings up 4.3%

PETALING JAYA: AMMB Holdings Bhd’s net profit grew 4.3% to RM313.17 million for the third quarter ended Dec 31, 2016, from RM300.15 million in the previous corresponding period, driven by lower operating expenses and tax.
Revenue, however, dropped 6.5% from RM2.12 billion to RM1.98 billion.
In a filing with the stock exchange, the group said its third-quarter net interest income expanded 5% on higher net interest margin of 2.02%, reflecting active margin management.
Its gross lending rose 3% year to date to RM90.7 billion, supported by growth in mortgages (15%), lending to small and medium enterprises (11%) and trade loans (13%), partly offset by contraction in auto and corporate loans.
AMMB’s asset quality improved with gross impaired loans ratio at 1.54%, down 40 basis points since FY16, with common equity tier 1 higher at 11.6%.
The group is of the view that margin compression in the banking system will continue due to competition for deposits, which will have impact on deposit interest rates, while the high loan-to-deposit ratio may lead to banks raising funds from longer term securities, which could add upward pressure on funding costs.
AMMB foresees the system’s loans and deposits rising at a moderate pace on the back of modest economic growth and expects its loan growth to be slightly below the system’s as it remains cautious on growth in preferred sectors.
AMMB’s nine-month net profit saw a 3.3% drop from RM1.02 billion to RM988.79 million, on the back of a 2.7% decline in revenue from RM6.31 billion to RM6.14 billion.