PETALING JAYA: AMMB Holdings Bhd
(AmBank) is entering financial year 2027 (FY27) on a more supportive domestic economic footing, although the banking group will have to navigate persistent margin pressure and heightened geopolitical risks in the year ahead.
For the first quarter ended June 30, 2026 (1Q27), the banking group reported a 0.8% year-on-year (y-o-y) increase in net profit attributable to shareholders to RM520.2mil, while net income rose 2.8% to RM1.33bil.
Earnings per share rose to 15.73 sen from 15.64 sen in the previous corresponding quarter.
In a statement, AmBank said the growth was supported by a 4.3% increase in net interest income to RM964.7mil, driven by 7% y-o-y loan growth to RM147.8bil.
However, net interest margin moderated to 1.93% from 2.01% a year earlier, reflecting lower asset yields following last year’s overnight policy rate cuts.
Non-interest income remained resilient, with higher wealth management income offsetting lower trading gains and insurance contribution.
AmBank Group chief executive Jamie Ling said the lender had delivered “a resilient start to FY27”, supported by continued revenue growth, loan expansion and disciplined cost management.
He said Malaysia’s economic fundamentals remained strong, with second-quarter gross domestic product growth accelerating to 6% y-o-y from 5.4% in the first quarter, although the unresolved Middle East conflict remained a source of continued uncertainty globally.
Meanwhile, operating expenses rose 2.1% y-o-y to RM575.5mil, while the cost-to-income ratio improved to 43.4% from 43.7%.
Profit before provisions rose 3.5% y-o-y to RM752mil, while profit before tax increased 4.2% to RM682.1mil.
Net impairment charges were marginally lower at RM69.8mil, although this included an additional RM52.5mil overlay provision for exposures deemed potentially vulnerable to sustained geopolitical tensions.
On asset quality, the group’s gross impaired loan ratio edged up to 1.62% from 1.59% at end-FY26, while loan loss coverage, including regulatory reserves, improved to 102.5% from 100.9%.
Loan growth was broad-based, with business banking gross loans rising 11% y-o-y to RM54.7bil, wholesale banking loans expanding 19% to RM23.5bil and retail banking loans growing 0.7% to RM67.7bil.
Business banking profit after tax rose 8% y-o-y to RM200.9mil, supported by higher income and lower net impairment charges.
Wholesale banking profit was unchanged at RM234.9mil, while income grew 13.3% to RM407mil, driven by a 23.8% increase in net interest income.
Retail banking profit after tax rose to RM111.9mil from RM49mil a year earlier, helped by lower expenses and net impairment writebacks following the group’s derisking efforts in the previous financial year.
At group level, customer deposits declined 2% year-to-date to RM144.1bil, mainly due to a 10% decline in current account, savings account or Casa deposits, partly offset by a 2.4% increase in time deposits.
Elsewhere, Islamic banking profit after tax and zakat rose 11.1% to RM150.5mil, while group treasury and markets profit fell 7.3% to RM139.4mil on lower trading gains. Insurance profit declined to RM8.6mil from RM32.4mil.
Looking ahead, Ling said the risk of a full closure of the Strait of Hormuz may ease further with a pathway established between neighbouring Gulf nations as a near-term de-escalation mechanism, while the revival of the US-Iran memorandum of understanding could serve as a longer-term step towards easing tensions.
He said the group remained focused on delivering its plans in the quarters ahead.
