KUALA LUMPUR: AMMB Holdings Bhd (Ambank) is optimistic over its outlook for FY24, after having wrapped its 2023 financial year on a high note with improvements in both its topline and bottomline.
"While we are acutely aware of the potential external challenges, such as the volatility in the global growth trajectory and heightening geopolitical tensions, we remain optimistic.
"The robust domestic demand, the labour market resurgence, the steady execution of multi-year investment projects, and the anticipated increase in tourism activities experienced in FY23 should continue to buoy us in FY24, albeit potentially at a more measured pace," said group CEO Datuk Sulaiman Mohd Tahir in a statement.
In the fourth quarter ended March 31, 2023, Ambank recorded a net profit of RM427.91mil on the back of revenue of RM1.16bil.
This brought the group's full-year net profit to RM1.74bil and revenue to RM4.74bil, up from a net profit of RM1.5bil and revenue of RM4.67bil in the previous financial year.
The group's earnings per share for FY23 was 52.41 sen, up from 45.54 sen in FY22.
The board of directors declared a final dividend of 12.3 sen per share, for a total FY23 payout of 18.3 sen per share, representing a dividend payout ratio of 35%.
"Importantly, we have met and surpassed the ambitious goals we set at the start of the year, including achieving an ROE of 10%, fortifying our balance sheet, and paying out a much-improved dividend payout ratio to reward our valued shareholders," said Sulaiman.
According to the group, the improvement in its total income was owing mainly to higher net interest income (NII) - up 8.1% y-o-y due to an expansion in loans - which represented about 75% or RM3.54bil of total income.
The remaining 25% or RM1.2bil of total income was non-interest income (NoII), which slipped 13.9% y-o-y, mainly owing to the divestment of AmGeneral Insurance Bhd coupled with decreased fee income from investment banking and retail wealth management.
The group said for continuing operations, total income grew 12.4% helped by NII and NoII, which saw a commendable y-o-y growth of 11% and 16.9%, respectively.
In terms of costs, Ambank registered a cost-to-income (CTI) ratio of 44.3%, improved from 44.9% in FY22.
The group said profit before provisions (PBP) was up 2.6% y-o-y to RM2.64bil while continuing operations registered a higher profit before PBP growth of 12.9% y-o-y
It said the net impairment charge of RM466.9mil in FY23, which included AmGen's net impairment charge of RM113.2mil, was 39.1% lower than in FY22, due mainly to the non-repetition of provisions taken on oil and gas accounts under wholesale banking in the previous year.
However, both retail banking and business banking required higher provision in FY23.
Overlay reserves carried forward increased to RM461.3mil from RM393.8mil in FY22 for retail and corporate sector exposures.
Loan loss coverage stood at 127.7%, while gross impaired loans ratio stood at 1.46%.
On loans and financing, Ambank recorded expansion across all its business segments for overall 8.5% growth to RM130.2bil.
Customer deposits registered 6.3% growth to RM130.3bil.
The group said time deposits increased 2.6% y-o-y while current account savings account (Casa) balances increased more substantially by 13.2% to RM48.8bil.
Consequently, the Casa mix improved to 37.4% from 35.2% previously, while the group's liquidity coverage ratio stood at 149.2%, down from 158.5% in FY22.
Post dividend payout, the financial holding company (FHC) Common Equity Tier 1 (CET1) capital ratio with transitional arrangement was higher at 12.51% from 12.2% in FY22, while total capital ratio (TCR) improved to 15.65% from 15.32%.
Without transitional arrangement, CET1 was at 12.1%, while TCR was at 15.47%