KUALA LUMPUR: AMMB Holdings Bhd
(AmBank), which has embarked on the final lap of its Focus 8 strategy, is focused on its commitment to value creation for shareholders and stakeholders alike.
“This entails not just an emphasis on revenue growth, but also on strict cost discipline, fortifying our capital base, maintaining healthy liquidity levels and vigilantly monitoring asset quality.
“In this unfolding financial narrative, we are keenly eyeing opportunities in the small and medium enterprises (SME) sector while upholding our environmental, social and governance mandates and championing a digital future for the group,” group chief executive officer Datuk Sulaiman Mohd Tahir said in a statement.
He noted that the robust 5.6% economic growth in the first quarter of 2023 paints a promising future for the nation’s fiscal trajectory.
“Despite the headwinds of tempered exports and muted external appetites, we are bullish on domestic demand, a pillar that has consistently been the backbone of our local economy,” he added.
In the first quarter ended June 30 (1Q24), AmBank registered a net profit of RM378.4mil, or earnings per share of 11.44 sen against RM410.4mil, or 12.40 sen posted in the same quarter last year.
Revenue rose 4.3% to RM1.2bil from RM1.15bil a year prior.
“This quarter’s financial results underscore AmBank’s commitment to resilience and strategic diversification of revenue sources. We navigated net interest margin compressions and, at the same time, solidified our liquidity with capital ratios improving further,” Sulaiman said.
AmBank said its continuing operations income grew 11.2% year-on-year (y-o-y), driven predominantly by a 67.8% growth in non-interest income (NoII), marginally offset by a 2.7% decline in net interest income (NII).
It said the strong NoII performance was contributed by group treasury and markets in wholesale banking, higher fee income from business banking, investment banking and asset management, as well as improved income from its insurance business.
The bank said that the lower net interest margin (NIM) of 1.76% this quarter was the key reason for the decline in its NII. However, NIM compression this quarter has moderated compared to Q423.
Overall expenses decreased 6.6% y-o-y to RM507.7mil. As a result, cost-to-income (CTI) was lower at 42.2%. CTI for continuing operations stood at 44.1%.
“Net impairment charges, however, were noticeably higher this quarter at RM190.4mil, compared to RM63.9mil in the same quarter the previous year, mainly due to higher provisions.
“As a result, reported net profit after tax and minority interests (Patmi) reduced 7.8% y-o-y to RM378.4mil with reported annualised return on equity at 8.3%. Patmi from continuing operations recorded a y-o-y decrease of 8.9% to RM352.3mil,” AmBank said.
“Our total gross loans and financing decreased by a marginal 1.0% to RM129.0bil in 1Q24 due to lower customer activities which lead to a reduction in the loans portfolio of wholesale banking and business banking.
“However, retail banking registered consistent loans growth,” AmBank said.
Total customer deposits stayed at RM130.3bil, with time deposits increasing 11.2% to RM90.7bil offset by a decrease in current account and savings account balances of 18.9% to RM39.6bil.
Its loan loss coverage ratio (inclusive of regulatory reserves) stood at 115.6%, while the gross impaired loans ratio was 1.66%.
