AmBank Group CEO Datuk Sulaiman Mohd Tahir said that a quarter-on-quarter basis,
KUALA LUMPUR: AMMB Holdings Bhd
reported a 20% increase in earnings at RM335.81mil in the fourth quarter from RM280.02mil a year ago boosted by higher net interest income (NII).
The banking group said Wednesday its revenue was slightly higher at RM2.14bil compared with RM2.10bil a year ago. Its earnings per share were 11.17 sen compared with 9.32 sen. It announced a dividend of 12.6 sen a share.
AmBank Group CEO Datuk Sulaiman Mohd Tahir said:“We recorded a net interest income (NII) of RM599.3mil in Q4 of FY2017, the highest level we have seen since Q2 of FY2016.
“This reflects our ongoing initiatives to improve our cost of funds and stronger loans growth momentum, particularly mortgages and loans to SMEs."
For FY ended March 31, 2017, its earnings were up just 1.7% to RM1.32bil compared with RM1.30bil in FY16 due to margin compression in the NII in H2 of FY17. This saw revenue declining to RM8.28bil from RM8.41bil a year ago.
Sulaiman said the banking group spent a good part of FY2017 setting the foundation to its Top 4 strategy and building the areas that support its growth agenda, focusing on improving margins and strengthening its balance sheet for optimal returns to its shareholders.
“Our profit before provision increased by a notable 5.5% to RM1.60bil largely supported by wholesale banking and the general insurance businesses.
“Net profit after tax and minority interests (PATMI) was up 1.7% to RM1.32bil. Return on equity (ROE) was at 8.5% and return on assets (ROA) improved to 1.1%,” he added.
Sulaiman pointed out AMMB's loan base increased 3.5% to RM91bil, led by mortgages which grew stronger at 20.5% on-year.
He added loans extended to SMEs, which are its target growth segment, grew 17.4%. Cards receivables base was up 7.6% from heightened acquisition of new cards and higher cards spending.
“Our deposits from customers grew 8.5% in the last quarter of FY2017. On a year-on-year basis, deposits expanded 4.1%, outpacing system growth of 3.4%,” it said.
He said the low-cost current accounts and savings accounts (CASA) grew 6.1%, reflecting the improvement in its transaction banking, particularly cash management and payroll solutions, working in tandem with retail banking as well as growing its SME customer base.
Sulaiman said FY2017 full year NII fell on-year due to margin compression in H2 of FY16 mainly driven by the roll off of higher yield legacy retail loans.
Non-interest income (NoII) ended the year stronger at RM1.47bil, up 11.9% underpinned by trading gains from debt capital market syndication and fixed income activities as well as other income.
He pointed out there was encouraging momentum in sustainable fee income especially in wealth management and bancassurance.
“Our expense growth was contained despite investments for growth and compliance as the group took on a concerted effort in executing various cost savings and efficiency initiatives. As a result, our cost-to-income ratio (CTI) improved by 1.5% to 57.4%.”
Sulaiman said asset quality remains sound with gross impaired loans ratio improved 8 bps to 1.86% driven by continued improvement in retail.
“Recoveries were stronger during the year, though net allowance write-back was marginally lower due to higher provisions on impaired wholesale loans. We remain watchful on our exposures to the oil and gas as well as commercial real estate sectors,” he said.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
