KUALA LUMPUR: AMMB Holdings Bhd posted lower net profit of RM263.82mil in the third quarter ended Dec 31,2020 and RM866.31mil in the nine-month period due to allowance for impairments on loans, advances and financing.
The banking group said in a statement, the 3Q net profit was lower by 31% from the RM382.15mil a year ago due to allowance of impairments totalling RM257.74mil compared with RM67.51mil a year ago.
For the nine-month period, its net profit was down by 20.8% from the RM1.09bil a year ago due to allowance for impairment of RM661.52mil compared with RM127.78mil in the previous corresponding period.
Operating revenue in 3Q was down by 11.8% to RM2.09bil from RM2.37bil a year ago. For the nine months, it was lower by 9.4% at RM6.44bil from RM7.11bil in the previous corresponding period.
9M financial performance
* AmBank Group said total income rose by 5.7% to RM3.42bil from higher net interest income as well as trading and investment income.
* Excluding net modification loss of RM15.1mil, underlying income increased 6.2% year-on-year (YoY), it said.
* It said expenses were broadly stable at RM1,607.6 million.
* Cost-to-income (CTI) ratio improved further to 47.0% from 49.6% a year ago, delivering a positive JAWS of 5.7%
* Profit before provisions (PBP) up 11.3% to RM1,815.5 million
* Net impairment charge of RM644.5 million (9MFY20: net impairment of RM133.5 million) mainly due to pre-emptive macro provisions of RM274.5 million in 9MFY21
* Gross impaired loans (GIL) ratio remained at 1.73% (FY20: 1.73%), with loan loss coverage (LLC) ratio2 of 103.4% (FY20: 93.4%)
* Net profit after tax and minority interests (PATMI) fell 20.8% to RM866.3 million as a result of higher impairment charges. Underlying PATMI (adjusted for net modification loss and pre-emptive macro provisions) stood at RM1,086.4 million
* Return on equity3 (ROE) at 6.0% (9MFY20: 8.1%), underlying ROE at 7.5%, with return on assets3 (ROA) of 0.77% (9MFY20: 1.02%) and basic earnings per share (EPS) of 28.79 sen (9MFY20: 36.35 sen)
* Gross loans and financing grew 4.4% year-to-date (YTD) to RM111.9 billion
* Customer deposits grew 5.4% YTD to RM119.0 billion, with current account and savings account (CASA) balances up 16.1% (CASA mix higher at 28.1%).
AmBank Group CEO Datuk Sulaiman Mohd Tahir, said: “We have reached an agreement with the Ministry of Finance of Malaysia for a sum of RM2.83bil to be paid to the Malaysian Government as the full and final settlement on all outstanding claims and actions in relation to the group's previous involvement with 1Malaysia Development Bhd and its related entities (global settlement).
“"While this will undoubtedly have a material impact on the group's Q4FY21 earnings and consequently FY21 results, it is important to note that we have adequate capital buffers to absorb the global settlement without an immediate need to raise additional equity capital.
“However, as a consequence of the global settlement, the group will not be proposing any final dividends for FY21. The group would like to assure investors and stakeholders that we remain financially resilient and are ready to capitalise on the opportunities ahead with our refreshed Focus 8 strategy, ” he said.
Sulaiman said AmBank Group continued to show resilience in its financial performance despite growth momentum being impacted by the implementation of the movement control orders.
"We achieved an 11.3% growth in PBP on the back of a 5.7% increase in revenue. The group’s net profit of RM866.3milli, however, was affected by additional macro provisions during the year while we continue to extend financial assistance to our borrowers.
"Excluding net modification loss and pre-emptive macro provisions, AmBank Group recorded an underlying net profit of RM1,086.4mil, reflecting a consistent and stable YoY achievement.
“Arising from the economic uncertainties due to the Covid-19 pandemic, we have undertaken pro-active measures by setting aside macro provisions of RM59.7mil in this quarter, with a cumulative macro provisions taken since the pandemic of RM441.8mil, ” he said.