PETALING JAYA: AMMB Holdings Bhd
(AmBank) saw a double-digit decline in its current account and savings account (CASA) balances in the first nine-month of financial year 2025 (9M25), amid the usual year-end deposit competition.
Gross loans, advances and financing, however, improved on the back of its business banking segment, which caters to small, medium and large enterprises.
In the retail segment, there was a decline in auto financing and personal financing, although this was partially offset by growth in mortgages.
“We delivered strong loan growth, especially from business banking, while moderating growth in retail banking to de-risk and redeploy our capital resources more profitably in line with our Winning Together (WT29) strategy.
“Our liquidity levels continue to be ample and our capital levels strong,” said AmBank group chief executive officer Jamie Ling.
In a statement, Ling said the banking group had delivered another strong quarter of earnings, and its year-to-date results for 9M25 have been “encouraging”.
The statement was released as part of AmBank’s third-quarter results announcement yesterday.
In the third quarter ended Dec 31, 2024 (3Q24), AmBank’s net profit fell by 10.5% year-on-year (y-o-y) to RM486.49mil, largely due to tax adjustment.
This lowered earnings per share to 14.71 sen.
However, net income or revenue increased by 7.8% y-o-y to RM1.24bil in the quarter. The stronger net income was achieved on higher net interest income (NII) and other operating income.
Contributions from associates and joint ventures also lifted the topline.
No dividend was declared for the quarter under review.
Cumulatively, for 9M25, net profit was up 6.9% y-o-y to RM1.49bil, while net income rose 4.9% y-o-y to RM3.65bil.
AmBank’s NII in the nine-month period grew 7.8% y-o-y to RM2.67bil, mainly driven by a 15-basis point expansion in net interest margin (NIM) to 1.94% as well as loans and financing growth of 4.4% y-o-y.
“Effective liability management efforts kept NIM stable despite the usual year-end deposit competition.
“The group’s income growth, underpinned by stable NIMs and loan growth, together with lower impairment charges culminated in another quarter of strong net profit formation and commendable return on equity (RoE).
“AmBank Group’s liquidity is at comfortable levels while capital position remains strong,” the banking group stated in a filing with Bursa Malaysia.
AmBank’s annualised RoE stood at 9.9%.
In 9M25, AmBank’s non-interest income fell by 2.3% y-o-y to RM972.6mil due to the non-repeat AmGeneral Insurance Bhd divestment gain of RM51.1mil in 9M24 and lower trading gains from the Group Treasury and Markets segment.
This was partially offset by higher fee income from segments like business banking, wealth management and investment banking.
Overall expenses increased 6.5% y-o-y to RM1.62bil, mainly due to higher personnel costs and computerisation costs, resulting in higher cost-to-income ratio of 44.5% for the period.
Net impairment charges reduced significantly to RM95.1mil, largely because of forward-looking reversals, reversals of provisions on corporate exposures and improved expected loss provisioning flow rates.
Meanwhile, the corresponding period in 9M24 recorded forward-looking charges as well as one-off credit impairment overlay and intangible assets impairment charges.
“In 9M24, the group recorded one-off charges amounting to RM520.2mil, comprising: additional credit impairment overlay of RM328.2mil, impairment of intangible assets of RM111.9mil and RM80mil for restructuring expenses.”
The banking group also reported yesterday that its CASA balances fell by 15.4% to RM44.6bil as compared to end-financial year 2024 (FY24).
CASA mix also declined to 32.2% in 9M25, as compared to FY24’s 37.1%.
Overall, AmBank’s customer deposits fell 2.8% year-to-date to RM138.4bil as management’s effort to improve margins continued. Time deposits grew 4.7% to RM93.8bil.
Meanwhile, total gross loans, advances and financing grew 2.2% to RM137.1bil from FY24’s RM134.1bil.
This was mainly driven by business banking (up by 9.7%), partially offset by lower loans growth in retail banking (contracted by 1.2%) while wholesale banking loans growth remained flat.
Breaking down by divisional performance, AmBank’s retail banking segment’s profit after tax (PAT) improved to RM182.2mil, mainly due to lower impairment, partially offset by lower income and higher operating expenses.
Gross loans, advances and financing declined 1.7% y-o-y to RM68bil due to a decline in auto financing and personal financing partially offset by growth in mortgages.
Total deposits increased 1.4% y-o-y to RM55.6bil.
Business banking’s PAT grew by 56.8% y-o-y to RM603.3mil, mainly attributable to higher income, lower operating expenses and lower net impairment. Gross loans, advances and financing increased 15.2% y-o-y to RM47.5bil, while total deposits declined 0.2% y-o-y to RM38.1bil.
Wholesale banking’s PAT grew 2.2% y-o-y to RM600.2mil, mainly driven by higher write-back of net provisions, partially offset by lower income and higher operating expenses.
Gross loans, advances and financing increased 6.6% y-o-y to RM19.6bil, meanwhile total deposits increased marginally by 0.2% y-o-y to RM51.3bil.
As for the investment banking and funds management business, PAT grew by 33% y-o-y to RM95.6mil mainly attributable to higher income, higher writeback of net impairment, but partially offset by higher operating expenses.
Islamic banking’s profit after taxation and zakat increased RM155mil or 58.5% y-oy to RM420mil.
Meanwhile, the PAT from AmBank’s continuing insurance businesses grew by RM47.2mil to RM61mil, primarily driven by higher premiums collected, partially offset by higher claims.
Looking ahead, AmBank believes it is on track with its refreshed WT29 strategy and is optimistic about its prospects in the current FY25.
The bank said the pragmatic implementation of Budget 2025, aptly themed “Reinvigorating the Economy, Driving Reforms and Prospering the Rakyat”, will provide further impetus for economic activity with fiscal stability.
“We continue to focus on our key strategic priorities and we are executing well in our first year of the WT29 strategy,” said Ling.
