KUALA LUMPUR: AMMB Holdings Bhd
's earnings rose 4.3% to RM313.16mil in the third quarter ended Dec 31, 2016 from RM300.15mil a year ago.
The banking group announced on Friday its revenue for the quarter however, fell 6.6% to RM1.977bil from RM2.116bil. Earnings per share were 10.42 sen compared with 9.99 sen.
For the nine months ended Dec 31, 2016, its earnings dipped 3.2% to RM988.79mil from RM1.022bil in the previous corresponding period. Its revenue slipped to RM6.14bil from RM6.31bil a year ago.
Commenting on the results, it said the Q3 earninings were up 4% from the second quarter. Its interest income grew 5% on higher net interest margins (NIM) of 2.02% (up 10bps)reflecting active margin management.
“Given the heightened pressures on the Malaysian bond market, our results for the nine months under review was impacted in terms of non-interest income. This was partially alleviated by an increase in fee income from loans and trade finance,” it said.
Durig the nine months ended Dec 31, 2016, AMMB's gross lending rose 3% year-to-date (YTD) to RM90.7bil, supported by growth in mortgages (15%), SME (11%) and trade (13%) loans, partly offset by contraction in auto finance and corporate loans.
However, deposits of RM86.7bil, showed a 4% contraction as the banking group's efforts in managing NIM reflecting focus on balancing funding costs. Current accounts and savings account grew 2% on-year.
“Asset quality improved with gross impaired loans ratio at 1.54%, down 40bps since FY16,” it said.
Comemting on the Q3 results, AmBank group CEO Datuk Sulaiman Mohd Tahir said there was an improvement in loans and deposits growth momentum, both of which increased 4% during the quarter.
“Loans extended to the SMEs, one of our key strategic growth segments, grew strongly at 10.6% YTD. One focus on the SME segment as a result of our Top 4 strategy has bore fruit as evidenced by the solid growth recorded from this segment,” he said.
Sulaiman said the banking group continued to actively manage its NIM and this has translated to stabilised NIM as well as higher net interest income this quarter. Fee income was up quarter-on-quarter from investment banking and loans related fees.
“Our recoveries were higher largely from retail whilst impairment charge was stable on-quarter. Overall profit was down, impacted by the volatility of trading and investment income, especially in fixed income as the ringgit bond market was weighed down by a series of global events this quarter,” he added.
Sulaiman said the group had further strengthened its asset quality and capital position in 2016. This was reflected in gross impaired loans ratio improving 40bps YTD to 1.54%.
“We maintain a disciplined approachto cost management and our cost optimisation initiatives have garnered year-to-date cost savings of RM116mil.
“Our growth agenda continues to focus on preferred segments vis-à-vis risk appetite, profit outcome and customer expectations.
“As a result of the Group’s Top 4 strategy, we continue to see good growth momentum in our preferred segments through the execution of our strategic initiatives. We continue to focus on strategic alliances and partnerships to drive penetration in the SME segment.
"We have also expanded our Wealth Management solutions and have been appointed as an agent for Amanah Saham Nasional Bhd.”
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