PETALING JAYA: AMMB Holdings Bhd
is expected to close the financial year ending March 31, 2026 (FY26) with record-high earnings.
According to Hong Leong Investment Bank Research (HLIB Research), while the lender’s loan growth may remain largely flat in the fourth quarter of financial year 2026 (4Q26) due to typical seasonal effects, this will be offset by robust contribution from non-interest income.
The bank’s key drivers include trading gains from its bond portfolio and higher fees across wealth management and transaction banking.
HLIB Research noted that despite net interest margin (NIM) slipping one basis point on a quarter-on-quarter basis in 3Q26 to 1.96%, annualised FY26 NIM is expected to exceed 1.94% in FY25, supported by proactive repricing measures.
This balanced performance across lending and non-lending segments provides a clear line of sight on profitability through year-end, HLIB Research further said.
In its report, the research house said AMMB maintains a strong capital buffer, with Common Equity Tier-1 comfortably above industry averages.
Even as the bank navigates ongoing strategic investments and operational growth, the trajectory supports progressive capital accumulation, the research house stated.
HLIB Research added that its channel checks indicate the bank is well positioned to sustain capital ratios while selectively deploying excess capital to support portfolio expansion.
Historical provisioning and overlays for retail and small and medium enterprise exposures provide a cushion against potential asset quality shocks, with a healthy gross impaired loan coverage ratio of 1.76 times as of end-3Q26, further reinforcing confidence in capital sustainability, HLIB Research said.
A senior analyst who tracks AMMB also pointed out that he expects the lender to close its current financial year on a “strong note”.
“I expect it to bring in some strong non-interest income numbers as a result of beefing up this segment,” he told StarBiz.
Meanwhile, HLIB Research said the effect of Basel III revisions on AMMB is expected to be largely neutral.
The research house noted that AMMB’s progressive dividend policy remains well-supported, with double-digit dividend per share growth embedded in its projections.
Under the “WT29” strategic roadmap, the bank targets a minimum 60% payout ratio by 2029 and given the consistent earnings trajectory and disciplined capital management, we estimate that this target could be accelerated to FY28, HLIB Research said.
This positions AMMB to deliver competitive yield and total shareholder return, while retaining flexibility to deploy excess capital strategically, reinforcing both shareholder value and long-term growth objectives, it added.
HLIB Research said it is maintaining its “buy” call on the bank with a higher target price of RM7.70, based on the implied 1.1 times 2027 price to book.
This sits above its five-year pre- pandemic rrice to book average deemed justified by a structural circa two percentage point return on equity uplift, versus the FY16 to FY20 cycle.
With a favourable risk-reward profile and compelling dividend yields of more than 6%, the research house is anticipating further legs in the potential capital appreciation.
At last look, AMMB’s stock was at RM6.60, valuing the lender at nearly RM22bil. AMMB posted a higher net profit of RM529.58mil in 3Q26 compared with RM486.49mil in the same period last year.
Revenue increased to RM1.28bil from RM1.24bil previously, driven by higher income and a higher net impairment writeback recorded in its wholesale banking division.
For the first nine months ended Dec 31, 2025, AmBank Group’s net profit rose to RM1.58bil from RM1.49bil previously, while its revenue also edged up to RM3.86bil from RM3.65bil.
