KUALA LUMPUR: AMMB Holdings Bhd
(AmBank) will continue to focus on growing its mid-tier corporate and small and medium enterprise (SME) loan segment, while turning more selective on retail lending, says its group chief executive officer Jamie Ling.
“Demand for loans is in the mid-tier corporates and SMEs, that’s where the business banking lending is, and that’s also where the returns are so we are focused on this area.”
That said, this strategy did not mean that large corporates such as the government-linked companies were not important, he noted.
“They are the adjacent ecosystem,” Ling said at a briefing held after the lender’s shareholders’ meeting here yesterday.
“For retail, we said let’s be a bit more of a focused lender.”
He said about 35% of the bank’s overall balance sheet was mortgages, and this was a very competitive segment; hence, the lender had turned more selective.
“Things like the types of borrower profiles, property, location are very important.
“Mortgages are still important, but we are more selective, we have narrowed the lending criteria.
“We are not the biggest bank around, so we cannot be everything to everyone, we have to be focused and choosy in the way we deploy our resources,” Ling added.
AmBank also said year-to-date, its total gross loans, advances and financing increased 0.8% to reach RM147.8bil, buoyed by growth in business banking and retail banking, while its wholesale banking remained broadly stable.
“In the first quarter ended June 30, 2026 (1Q27), gross loans grew at a 5% two-year compounded annual growth rate (CAGR) and 7% on a year-on-year (y-o-y) basis, amid higher unrated bonds outstanding, underpinning future revenue visibility,” it said.
Profit after tax and minority interests exceeded RM2.1bil, a two-year CAGR of 6% and a 1% y-o-y improvement in 1Q27.
“Last year was a great year for us, and we have started this year well. The compounding value will be from a position of strength.
“Our focus is on returns over market share,” Ling said.
He added that the bank had made some RM275mil in provisions at the moment across its retail, SME and corporate segments and that this was enough for now.
“This is the buffer we have internally, what we call our overlay, over and above what we normally take on as general provisions.
“We are dynamically looking at risks.”
Chief financial officer Phuah Shok Cheng said the lender’s net interest margins had moderated to 1.93% in the quarter under review, reflecting lower asset yields following last year’s overnight policy rate cuts.
“We will try to improve, last year we were at 1.98%, we will try to land within this range this financial year,” she said.
For 1Q27, AmBank reported a 0.8% y-o-y increase in net profit attributable to shareholders, reaching RM520.2mil, while net income rose 2.8% to RM1.33bil.
The group’s gross impaired loan ratio went up to 1.62% from 1.59% at end-financial year 2026 (FY26), while loan loss coverage, including regulatory reserves, improved to 102.5% from 100.9%.
Its customer deposits meanwhile were 2% lower year-to-date to RM144.1bil while current account savings account deposits declined 10% to RM46.9bil.
Meanwhile, business banking gross loans rose 11% y-o-y to RM54.7bil, wholesale banking loans expanded 19% to RM23.5bil while retail banking loans grew 0.7% to RM67.7bil.
Business banking profit after tax was up 8% y-o-y to RM200.9mil, helped by higher income and lower net impairment charges.
AmBank’s share price is higher year-to-date even as the lender has indicated that it could potentially release some RM2bil in excess capital to its shareholders.
“There is no good reason to retain capital when you have access.
“We already have access to capital today,” Ling said, adding that the group had flagged that this would be returned to shareholders in the form of special dividends.
Meanwhile, CIMB Research said in a note to its clients that while any distribution of the RM2bil to RM2.1bil excess capital above the 60% payout ratio was unlikely within FY27, prospects should improve by FY28, when the Basel 3.1 transition for internal ratings-based banks takes effect on Jan 1, 2028.
Separately, Bernama reported that AmBank expects its loan growth to remain at around 7% to 8% for FY27), supported by continued demand from mid-tier corporates and SMEs.
Ling said the group’s gross loans had expanded 7% year-on-year to RM165bil in the first quarter of FY27, providing a strong base for further income generation.
Shares in AmBank ended flat at RM7.10 apiece yesterday, valuing the whole group at some RM23.5bil.
