PETALING JAYA: AMMB Holdings Bhd posted an underlying net profit of RM416.7mil, up by 6.5%, in the first quarter (Q1) ended June 30,2020 after adjusting for net modification loss and pre-emptive macro provisions.
The banking group said yesterday that 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%, ” it said.
AMMB said its expenses were well contained at RM538.6mil, up by 1.9% while its cost-to-income 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 (1Q20: net recovery of RM32.5mil), with an additional RM10.3mil pre-emptive macro provision, ” it added.
The lender also 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 (pic) said in a statement that 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.
Summary of Q1FY21 Results
• Total income up by 2.6% to RM1,092.4 million, underpinned by higher trading and investment income, partially offset by margin compression and net modification loss of RM57.5 million. Excluding the net modification loss, underlying income increased 8.0%
• Expenses were well contained at RM538.6 million, 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 RM553.8 million, underlying PBP grew 14.1%
• Net impairment charge of RM49.9 million (Q1FY20: net recovery of RM32.5 million), with an additional RM10.3 million pre-emptive macro provision
• Gross impaired loans (GIL) ratio of 1.66% (FY20: 1.73%), with loan loss coverage (LLC) ratio at 97.0% (FY20: 93.4%). Regulatory reserve of RM382.3 million, together with total expected credit loss allowances, represent 1% of total credit exposures
• Net profit after tax and minority interests (PATMI) declined 6.7% to RM365.2 million. Underlying PATMI of RM416.7 million grew 6.5% (adjusted for the net modification loss and pre-emptive macro provision)
• Return on equity (ROE) lower at 7.7% (Q1FY20: 8.8%), underlying ROE at 8.8%. Return on assets (ROA) of 0.97% (Q1FY20: 1.11%) and basic earnings per share (EPS) of 12.1 sen (Q1FY20: 13.0 sen)
• Gross loans and financing remained broadly stable year-to-date (YTD) at RM107.4 billion
• Customer deposits increased 1.2% YTD to RM114.3 billion, current account and savings account (CASA) balances grew 6.2% (CASA mix higher at 26.8%)
• Financial Holding Company (FHC) Common Equity Tier 1 (CET1) capital ratio strengthened to 12.5% (FY20: 12.4%) and Total Capital ratio of 15.9% (FY20: 15.8%)
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