KUALA LUMPUR: AMMB Holdings Bhd (AmBank Group) posted net profit of RM711.03mil in the first half ended Sept 30,2019, which was 2.2% higher from RM695.74mil a year ago.
It announced on Friday 1H total income grew by 5.6% to RM2.13bil, with a consistent net interest income (NII) growth of 4.6%, and stronger fixed income trading and investment gains.
AmBank said profit before provision (PBP) increased by 7.6% to RM1.078bil. It declared at interi dividend of six sen a share for the second quarter, higher than the five sen a year ago.
Below are the highlights of the 1H financial results:
* Total income grew 5.6% to RM2,133.5 million, with a consistent net interest income (NII) growth of 4.6%, and stronger fixed income trading and investment gains
• Expenses remain stable at RM1,054.8 million. Cost-to-income (CTI) ratio improved further to 49.4% from 50.4% a year ago, once again delivering positive jaws
• Profit before provision (PBP) increased by 7.6% to RM1,078.7 million
• Net impairment charge of RM76.6 million (H1FY19: RM17.9 million) largely due to increased gross provisions charged for Wholesale Banking offset by releases and recoveries achieved, a net increase in Business Banking provisions and higher expected credit loss on Retail Banking portfolios
• Net profit after tax and minority interests (PATMI) grew 2.2% to RM711.0 million
• Return on equity (ROE) at 7.9%2 (H1FY19: 8.2%), with return on assets (ROA) of 1.01%2 (H1FY19: 1.06%) and basic earnings per share (EPS) of 23.63 sen (H1FY19: 23.13 sen)
• Gross loans and financing at RM102.0 billion, remained broadly stable year-to-date (YTD)
• Loans grew 1.6% YTD, excluding auto loans. Customer deposits was stable at RM102.7 billion, decreased 3.9% YTD
• Impaired loans (GIL) ratio stood at 1.77% (FY19: 1.59%), with loan loss coverage3 (LLC) ratio of 105.8% (FY19: 114.0%)
• Financial Holding Company (FHC) Common Equity Tier 1 (CET1) capital ratio was higher at 12.6% (FY19: 11.9%) and Total Capital ratio of 16.1% (FY19: 15.4%)
• Higher interim dividend of 6 sen (H1FY19: 5 sen) per share
AmBank Group CEO Datuk Sulaiman Mohd Tahir said the group was pleased to have delivered strengthened results for the first half of the year.
“We continue to demonstrate good progress with improving trends in our income momentum, operating leverage as well as profitability.
“Total income for the group rose 5.6% year-on-year propelled by consistent net interest income growth, stronger trading gains and investment income from group treasury and markets as well as general insurance.
“Our unwavering focus on cost efficiency has enabled us to deliver improved CTI. As a result, we were able to achieve a good profit before provision growth of 7.6%.
“Despite the progressively challenging operating environment compounded by the normalisation of credit costs, the group recorded a 2.2% increment in net profit year-on-year. In line with the group’s good results, strong capital positions and our commitment to deliver value to our shareholders, we are pleased to declare a higher interim dividend of 6 sen per share, ” Sulaiman said.
AmBank said the group’s income for the second quarter (Q2FY20) increased 6.1% compared to a year ago (Q2FY19), driven by better lending volumes and strong trading and investment income performance.
Compared with the preceding quarter (Q1FY20), income was broadly stable quarter-on-quarter (QoQ) as stronger Group Treasury & Markets trading income and higher NII were mitigated by softer insurance income.
Meanwhile, net interest margin (NIM) recovered 4bps to 1.91% (Q1FY20: 1.87%).
Quarterly net profit decreased 18.4% QoQ as credit cost increased and the absence of large recoveries achieved in the first quarter.