AMMB banking on tie-ups with MetLife, Kurnia and MBf Cards to grow divisions

PETALING JAYA: AMMB Holdings Bhd will leverage on its strategic partnerships with MetLife International Holdings Inc, Kurnia Insurans (M) Bhd and MBf Cards (M) Sdn Bhd for a focused organic growth in its four main divisions for the financial year ending March 31, 2015 (FY15).

AMMB group managing director Ashok Ramamurthy (pic) said the general insurance division aimed to maintain its leading position in motor through bancassurance and synergies from its Kurnia acquisition and, at the same time, expand its non-motor segments.

Its retail banking segment would focus on building emerging affluent and small business customers, while wholesale banking aimed to grow franchise value by targeting value segments, he said in AMMB’s 2014 annual report.

Its Islamic banking division meanwhile would focus on expanding main bank relationships, which would drive growth in low cost deposits and capital efficient investment accounts, Ramamurthy said.

AMMB acquired Kurnia for RM1.63bil in September 2012, positioning itself as the country’s second largest general insurer. Later, it bought MBF Cardsfor RM623.4mil.

AMMB’s integrations with Kurnia and MBF Cards are slated for completion within the financial year.

“For Kurnia, we achieved a total of RM63.7mil cost synergies to-date and our combined AmG-Kurnia business remains Malaysia’s largest motor insurer. In MBf Cards, we achieved synergies of RM20.6mil in FY14, surpassing our initial target of RM19mil,” Ramamurthy said.

“We have maintained our position as top three in merchant acquiring business with over 55,000 merchants in force.”

AMMB non-independent and non-executive chairman Tan Sri Azman Hashim said AMMB’s strategic partnership with MetLife in April, which birthed AmMetLife, would ultimately provide greater and better choices in financial planning solutions for Malaysians.

The deal entailed MetLife to 50% plus one share in AmLife Insurance Bhd and 50% less one share in AmFamily Takaful Bhd.

“We are also investing in processes and systems in preparation for the goods and services tax, which will come live in April 2015. In insurance, we are getting ready for the anticipated de-tariffication in 2016,” Ramamurthy said.

For FY14, AMMB reported profit after tax and non-controlling interests of RM1.78bil, up 10% from the previous year.

Return on equity was 14.1%, and earnings per share was up 9.7% to 59.3 sen.

At its upcoming AGM on Aug 21, AMMB will seek approval from shareholders for its proposed final single tier dividend of 16.9% for the financial year ended March 31, 2014. It would bring total dividends for the year to 24.1 sen, 9.6% high than last year’s 22 sen.