KUALA LUMPUR: AMMB Holdings Bhd
(Ambank) shrugged off the effects of net interest margin (NIM) compression in FY24 to record stronger bottomline compared to the previous year.
Over the full financial year, the bank posted a net profit of RM1.87bil as compared to RM1.71bil in FY23, while revenue came in at RM4.65bil, which was slightly lower than RM4.71bil in the previous year.
Consequently, earnings per share was 56.49 sen against 51.62 sen previously.
In the fourth quarter alone, Ambank's net profit was RM476.54mil compared to RM427.39mil in 4QFY23 while revenue rose to RM1.17bil from RM1.16bil in the comparative quarter.
The board of directors proposed a dividend of 16.6 sen per share, which would bring total annual dividends to 22.6 sen per share, a 23% increase over the previous year's payout.
In its review of the result, the bank reported the negative effect of NIM compression, which shrank net interest income by 6.7% to RM3.3bil.
However, this was offset by a robust growth in non-interest income (NOII), which expanded 14.7% year-on-year (y-o-y) to RM1.34bil on the back of strong growth in fee and investment income as well as trading gains from the group's treasury and markets, and forex income.
According to Ambank, expenses shrank 2.3% to RM2.05bil, which marginally improved the cost-to-income ratio to 44.2% from 44.6% previously.
Net impairment charge was higher at RM769.7mil compared to RM466.9mil due to additional credit impairment overlay of RM328.2mil and intangible assets impairment of RM111.9mil taken in 3QFY24.
The group also recognised a RM80mil provision for restructuring expenses in 3QFY24.
Total one-off charges in FY24 comprising credit impairment overlays, impairment of intangible assets and restructuring expenses amounted to RM520.2mil.
During the financial year, total gross loans and financing grew 3% y-o-y to RM134.1bil, mainly due to business and retail banking.
Total customer deposits grew 9.3% y-o-y to RM142.4bil, driven by 9.9% growth in time deposits to RM89.6bil and an 8.1% increase in current account savings account (Casa) to RM52.8bil. Casa mix was 37.1%.
On outlook, group CEO Jamie Ling said the bank expects global financial markets to remain volatile, centred around the inflation outlook and monetary policy direction on interest rates globally.
"External demand drivers have improved despite on-going geopolitical tensions and conflicts. Domestically, we expect a 4% to 5% GDP growth for Malaysia’s economy in 2024, supported by resilient domestic demand and improving labour markets driving consumption.
"We also expect increased tourism activities to boost the economy and the spillover effects of the technology upcycle to drive foreign direct investment into our country," he said.
