KUALA LUMPUR: Banking group AmBank Group Bhd reported a firmer set of financial results for the second quarter ended Sept 30, 2018 reflecting improving trends in its income momentum, operating leverage and profitability.
Announcing its results on Thursday, it said net profit rose 5% to RM348.15mil from RM331.46bil a year ago. Revenue increased by 8.9% to RM2.313bil from RM2.125bil.
Earnings per share were 11.57 sen compared with 11.02 sen. It declared an interim dividend of five sen a share.
For the first half, its net profit rose at a faster pace of 5.5% to RM695.74mil from RM659.74mil in the previous corresponding period. Its revenue rose by 6.6% to RM4.48bil.
Highlights of H1 results
* Income grew 3.7% to RM2,020.8 million underpinned by 5.3% increase in net interest income (NII). Net interest margin (NIM) at 1.97%
*Expenses reduced by 8.7% to RM1,018.4 million, driven by business efficiency initiatives. Cost-to-income (CTI) ratio improved to 50.4% from 57.2% a year ago
* Consequently, profit before provision (PBP) increased 20.3% to RM1,002.4 million
*Net impairment charge remained negligible
* Net profit after tax and minority interests (PATMI) grew 5.5% to RM695.7 million
* Return on equity (ROE) improved to 8.2%2 (FY18: 7.0%), with return on assets (ROA) of 0.97%2 (FY18: 0.83%) and basic earnings per share (EPS) of 23.13 sen (H1FY18: 21.94 sen)
*Gross loans and financing grew 3.8% YTD to RM99.9 billion. Customer deposits of RM100.8 billion, up 5.2% YTD
*Gross impaired loans (GIL) ratio at 1.72% (FY18: 1.70%), loan loss cover3 (LLC) ratio higher at 111.3% (FY18: 100.5%)
*Aggregated banking entities Common Equity Tier 1 (CET1) capital ratio of 11.5%, total capital ratio of 16.2%
AmBank Group CEO Datuk Sulaiman Mohd Tahir said: “We continued to build on the good progress made last year with improving trends in our income momentum, operating leverage and profitability.”
He said the banking group's assertive business efficiency initiatives enabled us to deliver positive JAWS and achieve a CTI of 50.4%, ahead of plan.
“Credit costs remained negligible and our overall asset quality remained resilient. The group’s returns on equity (ROE) improved to 8.2% compared with 7.0% in FY18.
Sulaiman said for the third quarter in a row, the group achieved an income of more than RM1bil.
Excluding the gain on disposal of foreclosed property in the first quarter, underlying income grew 1.5% quarter-on-quarter (QoQ) amidst a more cautious market sentiment.
For H1, the group’s NII increased 5.3% year-on-year to RM1.29bil, driven by consistent loans and deposits growth. Net interest margin fell slightly, with margin compression from time deposit repricing.
Non-interest income (NoII) of RM730.8mil, grew marginally on-year.
AmBank Group's wealth management, corporate and business banking fee income performer well and offset a lower financial markets and investment banking revenue outturn.
The improved performance of the general insurance business was driven by lower claims and the actuarial revaluation gains experienced by the life Insurance business had a positive impact on this business segment.
The group's overall expenses falling 8.7% on-year to RM1.018bil.
It recorded a net impairment charge of RM17.9mil in the first half compared with net recovery of RM48mil a year ago.
Gross impaired loans ratio remained stable at 1.72% and loan loss cover improved to 111.3%.
Gross loans grew consistently in the targeted segments. On the retail front, mortgage loans grew 8.1% year-to-date (YTD) to RM28.5bil whilst card receivables grew 8.7% YTD to RM2.2bil.
“Reflecting our focus on our Top 4 strategy, the group’s overall loans to small and medium enterprises (SME) grew 8.3% YTD to RM18.1bil,” it said.
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