KUALA LUMPUR: AMMB Holdings posted underlying net profit of RM416.7mil, up by 6.5%, in the first quarter ended June 30,2020 after adjusting for net modification loss and pre-emptive macro provision.
It said on Wednesday total income increased by 2.6% to RM1.09bil, underpinned by higher trading and investment income, partially offset by margin compression and net modification loss of RM57.5mil. “Excluding the net modification loss, underlying income increased 8.0%, ” it said.
AMMB said its expenses were well contained at RM538.6mil, up by 1.9%. Cost-to-income (CTI) ratio improved further to 49.3% from 49.7% a year ago.
“Profit before provisions (PBP) increased 3.3% to RM553.8mil, underlying PBP grew 14.1%. Net impairment charge of RM49.9mil (Q1FY20: net recovery of RM32.5mil), with an additional RM10.3mil pre-emptive macro provision, ” it added.
AMMB said net profit after tax and minority interests fell by 6.7% to RM365.16mil from RM391.46mil. Earnings per share were 12.14 sen compared with 13.01 sen.
AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir said he was satisfied with the group’s performance with underlying net profit growing 6.5% year-on-year despite the Covid-19 pandemic and the resulting Movement Control Order (MCO).
“We continue to deliver revenue of over RM1bil for the quarter under review, underpinned by strong trading and investment income, which cushioned the impact of margin compression and net modification loss taken on loans and advances under the moratorium, ” he said.
Sulaiman said the bank undertook a pre-emptive macro provision since the onset of this pandemic of RM177.6mil.
When compared with the fourth quarter ended March 31,2020, total income increased 10.4%, reflecting strong markets trading income and better investment income from general Insurance.
“Net profit increased 47.5% quarter-on-quarter (QoQ), mainly due to the absence of the macro provision taken in 4QFY20.
“Excluding the macro provision in both quarters and the net modification loss, the Group’s underlying net profit was up by 11.2% QoQ, ” he said.
The automatic deferment of all loan/financing repayments (except for credit card balances) for a period of six months since April 1 did have a small impact.
“The financial impact arising from the measures implemented in response to Covid-19 is a net loss of RM57.5 million in 1Q (net modification loss).
Sulaiman said the group provided special relief facility (SRF) financing at a concessionary rate to assist SME businesses adversely impacted by the Covid-19 pandemic.
He said RM751mil of loans have been approved under the SRF scheme to its customers, of which RM585mil loans have been disbursed to date.
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