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Higher net income lifts AMMB Q3 earnings

27 Feb 2020 / 13:50 H.

PETALING JAYA: AMMB Holdings Bhd reported a 9.2% increase in net profit to RM382.15 million for the third quarter ended December 31, 2019 against RM349.88 million in the same quarter a year ago, underpinned by higher net interest income and other operating income.

Its revenue came in at RM2.37 billion, 3% higher than RM2.3 billion previously.

For the nine-month period, AMMB’s net profit also expanded 4.5% to RM1.09 billion from RM1.05 billion a year ago, with revenue rising 4.8% to RM7.11 billion from RM6.79 billion.

AMMB said in a filing with the stock exchange that its nine-month total income soared 9.1% to RM3.24 billion, driven by a 6.1% growth in net interest income and net interest margin of 1.93%.

Non-interest income also went up 14.9% on the back of strong fixed income trading gains and higher investment banking fee income. Customer deposits were broadly stable at RM105.7 billion.

However, the group recorded a net impairment charge of RM133.5 million, largely due to increased gross provisions charged for wholesale banking and business banking, coupled with lower recoveries from wholesale banking and retail banking.

Gross loans and financing increased 4.2% to RM104.5 billion, with higher impaired loan ratio of 1.71% versus 1.59% in FY19. Loan loss coverage ratio came in at 105.2%.

AMMB’s common equity tier 1 capital ratio was higher at 12.2% while total capital ratio stood at 15.6%.

Looking ahead, AmBank Group CEO Datuk Sulaiman Mohd Tahir said the overnight policy rate cut should provide positive impetus to the economy and the capital market.

“In tandem with a moderate economic outlook, the banking system loans growth is expected to grow around 4.3% for the calendar year 2020.”

“Barring any unforeseen circumstances, we expect the group to meet its FY2020 financial guidance to investors.”

At the midday break, AMMB’s share price was unchanged at RM3.78 on 598,000 shares done.

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