AMMB’s Q3 profit surges 59.8% on higher lending, recoveries

21 Feb 2019 / 14:51 H.

KUALA LUMPUR: AMMB Holdings Bhd’s net profit for the third quarter ended Dec 31, 2018 jumped 59.8% to RM349.88 million from RM218.98 million a year ago, propelled by higher lending volume, lower cost base and increase in recoveries.

Its revenue rose 6.5% to RM2.30 billion compared with RM2.16 billion in the previous year’s corresponding quarter.

For the nine-month (9M FY19) period, the group’s net profit grew 19% to RM1.05 billion from RM878.72 million a year ago, while revenue for the year jumped 6.6% to RM6.79 million from RM6.37 million in the previous year.

AMMB told Bursa Malaysia that its total income expanded 2% for 9M FY19. Net interest income grew 5.9% to RM1.95 billion, supported by a consistent expansion of its loan base.

Non-interest income dropped 4.7% to RM1.02 billion due to markets volatility and weaker sentiments, resulted in lower contributions from markets, funds management and investment banking. This was partially cushioned by higher fee income from corporate banking and business banking, coupled with better outcomes from general and life insurance businesses.

The group recorded a net recovery of RM33.4 million in 9MFY19 against an impairment charge of

RM32.9 million in the same period last year, aided by several large corporate recoveries. Gross impaired loans ratio improved 8 basis points to 1.62% and loan loss cover rose to 116.8%.

AMMB’s gross loans growth rose 4.2% to RM100.4 billion for 9M FY19, while customer deposits grew 11.4% to RM106.8 billion.

As at end-December 2018, the group’s financial holding companies common equity tier 1 ratio and total capital ratio stood at 12% and 15.7%, respectively.

“We have also achieved a few large corporate recoveries, providing additional boost to our earnings. Our return of equity (ROE) has improved to 8.2% (9MFY18: 7.2%), and I believe we are well on track to achieve our FY19 ROE target of 8.5%,” AmBank group CEO Datuk Sulaiman Mohd Tahir said in a statement.

He noted that the positive outlook for Malaysia will underpin a loans growth of about 4.9% for the banking industry in 2019.

“Our loans and customer deposits growth has been particularly encouraging and we remain committed in propelling growth in our target segments. Our costs have been well contained as we continue to invest for growth. We have increased our liquidity buffers and strengthen our capital positions.”

He said the group is also targeting to conclude the sale of retail non-performing loans by March 31, 2019, which it has announced earlier. This is part of AMMB’s initiatives to improve its capital position and focus its resources on newer vintage delinquent loans.

At 2.40pm, AMMB’s share price was trading 14 sen or 3.1% higher at RM4.59 on 969,500 shares done.

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