KUALA LUMPUR (Aug 20): AMMB Holdings Bhd (KL:AMBANK), the country’s sixth-largest banking group by assets, on Tuesday reported a 32.2% rise in first-quarter net profit, thanks to significantly lower impairment charges and higher interest income.
Net profit for the three months ended June 30, 2024 (1QFY25) was RM500.2 million, compared with RM378.37 million a year earlier, AMMB said in a stock exchange filing. Net impairment losses decreased to RM12.3 million from RM190.4 million, partly due to higher forward-looking cancellations.
Net interest income increased 6.4% to RM860.9 million from RM808.7 million. Noninterest income decreased 19.2% to RM317.6 million from RM393.2 million, driven by lower trading and securities gains, while 1QFY2024 was also boosted by a one-off gain of RM51.1 million from the sale of a general insurance unit.
No dividend was announced for the reporting quarter.
Looking ahead, AMMB plans to prioritize the growth of its small and medium enterprises and medium-sized corporate segments to drive credit expansion. In addition, the bank aims to improve its wealth management services and develop efficient supply chain solutions to better serve customers.
AMMB is also committed to maintaining healthy liquidity levels and continuously strengthening its capital base, while closely monitoring the quality of its assets to mitigate balance sheet risks.
“We have made a great start to the new financial year with the implementation of our Winning Together (WT29) strategy and remain optimistic about our outlook for financial year 2025,” AMMB CEO Jamie Ling said in a statement.
The net interest margin, a measure of the profitability of interest charged on loans after deducting the return on deposits, increased 13 basis points to 1.89%. In the first quarter of fiscal 2025, gross loans, advances and financing increased 2.9% year-on-year, mainly due to growth in commercial loans.
Total expenses increased by 2.5 percent compared to the previous year, increasing the cost-income ratio to 44.2 percent.
Annualized return on equity improved to 10.2% from 8.3% last year, while return on total assets increased to 1.02% from 0.83%.
In terms of asset quality, the impaired loan ratio (the percentage of debts considered uncollectible relative to total loans) was 1.70%, while the loan loss coverage ratio, including regulatory provisions, was 107.6%.
The Common Equity Tier 1 (CET1) ratio – a measure of a bank’s capital strength based on top-quality regulatory capital – improved to 13.24 percent, reflecting a reduction in risk-weighted assets as a result of repayments and improved reserves from the portfolios measured at fair value through other comprehensive income.
AMMB shares had gained nine sen or 1.84% to RM4.98 by lunchtime on Tuesday, giving the company a market capitalisation of RM16.5 billion ahead of the results announcement.
