KUALA LUMPUR: AMMB Holdings Bhd (Ambank Group) is expecting to hit its annual loans growth of 4%-5% for 2019 as it is seeing an increase in disbursements in loans soon.
The bank reported its loans growth in the year to date period in the first half almost flat from last year due to increased people paying off their loans to the bank.
“We are very confident of hitting this target because we already have secured some of the disbursements (new loans).
“The first half saw big repayments (of loans) by the large corporates of their loans, ” it’s group chief executive officer Datuk Sulaiman Mohd Tahir said at a press conference yesterday.
“This is supposed to be supplemented by new drawdowns that we expected to happen but unfortunately this didn’t happen and because of this we had a reduction of loans. When the environment is a bit soft and people are not investing then people tend to pay off their loans, ” he said.
He said given thing are more firm now, some of these corporates are starting to lend again and the disbursements have been secured.
To achieve the loans growth target of 4-5%, the bank said that it would have to disburse some RM6bil in loans.
Loans growth in the second half will be driven by the large corporates and also an anticipated pick up in the hire purchase segment of loans.
“Half of this is in the wholesale banking space and there a few very large transactions that we have been working on for reasons that are beyond our control whether there has been a delay in project etc, ” it’s group chief financial officer Jamie Ling said.
“This business has been one of our growth engine and the step up (in disbursements) will help us. While on retail, if we are able to arrest the decline in the hire purchase, we hope to be able to increase disbursements while growth in mortgages is flowing, ” Ling said.
The bank’s gross loans increased by 2.0% year on year (yoy) in the second half at RM102.0bil with growth in mortgages, mid corp, retail small and medium enterprises and business banking loans being offset by corporate loan repayments and the continued decline in auto loans.
The bank said in its press release that excluding auto loans, gross loans expanded 1.6% in the year to date period in line with industry growth rates.
It 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.
The bank said that 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.