AMMB Q3 net profit jumps nearly 60% to RM349.8m

AmBank group CEO Datuk Sulaiman Mohd Tahir said the nine-month results demonstrate that the banking group's strategies which have been put in place over the last couple of years are bearing fruits on its bottom line and its businesses.

KUALA LUMPUR: AMMB Holdings Bhd's earnings climbed by 59.7% to RM349.87mil in the third quarter ended Dec 31, 2018 from a year ago, boosted by higher lending volume, lower cost base and increase in recoveries.

The banking group announced on Thursday the net profit a year ago was RM218.97mil. Its revenue increased by 6.5% to RM2.30bil from RM2.26bil. Earnings per share were 11.63 sen compared with 7.28 sen.

When compared with the second quarter ended Sept 30, 2018 (Q2 FY19), the net profit in the just ended quarter was just up 0.5% from RM348.15mil. Revenue slipped 0.6% from RM2.32bil in Q2.

“Fund based income from interest bearing assets continue to increase mainly fom interest on customer lending. Interest income from customer lending grew mainly due to increase in term loans and mortgages. Trading and investment income results declined compared to last quarter,” it said.

AMMB said funding costs namely interest from deposits from customers and banks and other financial institutions increased in Q3 due to the increase in average balances. Net interest margin declined to 1.88% compared to 1.91% in Q2.

“Overall other operating income decreased for this quarter compared to preceding quarter. Market based income declined attributable to fair value losses on revaluation of trading securities offset by increase in gain from derivatives and disposal of securities,” it said

Total operating expenses increased marginally mainly from general and administrative expenses offset by reduction in personnel expenses.

Credit costs reduced driven by higher recoveries and lower loss allowance provided for loans, advances and financing which were assessed on individual basis offset by higher loss allowance provided on collective basis.