AmBank Group CEO Datuk Sulaiman Mohd Tahir said:
KUALA LUMPUR: AMMB Holdings Bhd
posted a firmer set of financial results with earnings and revenue slightly higher in the first quarter ended June 30, 2017, underpinned by business banking, transaction banking, global markets and mortgages.
It announced on Thursday that Q1 earnings rose 1.6% to RM328.27mil from RM323mil while revenue inched up just 0.8% to RM2.08bil from RM2.06bil. Earnings per share were 10.92 sen compared with 10.74 sen.
AmBank Group CEO Datuk Sulaiman Mohd Tahir said: “We are pleased to kick off the new fiscal year with an improved profit before provisions of RM429.1mil.
“Our results were driven by encouraging topline growth particularly in business banking, transaction banking, global markets and mortgages.”
Sulaiman said the banking group's loans and financing base recorded a modest growth of 2% year-to-date (YTD).
Its business banking loans base grew 4.6% YTD as well as mortgages (+4.3% YTD).
AMMB had also pushed ahead to grow the lucrative small and medium size enterprises (SME) segment with the newly set up enterprise business centres and dedicated new SME segment hunter teams to drive growth in SME loans.
As for the cards receivables, it recorded a 1.26% growth YTD mainly as a result of its awareness campaigns.
“We are also seeing good pick-up in our AmBank BonusLink Visa Credit Card application which was launched in April this year.”
“In line with the group’s four-year strategy, we undertook a planned reduction in corporate fixed deposits which saw a 1.95% YTD contraction.
“This contraction was cushioned by higher retail and cash management current accounts which fuelled the 2.2% YTD expansion in current accounts and savings accounts (CASA). We see transaction banking maintaining good growth momentum and healthy cash management pipelines,” he said.
Sulaiman pointed out the banking group's higher net interest income was driven by lending growth in targeted segments, while net interest margin stood at 2.02%.
Fee income was boosted by stronger fixed income trading, foreign exchange and derivatives sales.
He also pointed out the banking group was currently focusing its investments in growth areas.
For instance, on a on-quarter basis, expenses fell 5.1% whilst cost-to-income improved 1.6% as it kept a tight rein on our operating cost.
“In terms of asset quality, the droup’s credit cost is normalising with lower recoveries and writebacks on performing loans. GIL was stable at 1.88%, in line with the previous fiscal year.
“The group maintained adequate capital with CET 1 ratio at 11.7%, and remained watchful of corporate loans impairment in select sectors,” he said.
Highlights of AMMB Q1 financial performance:
* Income up 3.3% on-year to RM982.2mil supported by higher net interest income (NII) (+8.4%) and improved net interest margin (NIM) (+8bps) to 2.02%;
* Profit before provision up 3.2% on-year to RM429.1mil;
* Net profit after tax and minority interests (PATMI) at RM328.3mil up 1.6% on-year;
* Return on equity (ROE) of 8.1%2, return on assets (ROA) of 1.08%2 and earnings per share3 (EPS) of 10.92 sen;
* Cost-to-income (CTI) ratio at 56.3%, unchanged on-year;
* Gross loans and financing grew 2.0% year-to-date (YTD) to RM92.8bil;
* Gross impaired loans (GIL) ratio at 1.88%; and
* Common Equity Tier-1 (CET 1) Capital ratio at 11.7%.
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