AmBank group chief executive Jamie Ling.
PETALING JAYA: AMMB Holdings Bhd
(AmBank) is optimistic about its prospects for the financial year ending March 2025 (FY25) as it has recorded improved performance in the first half of the year compared with the same corresponding period previously.
‘“We are pleased with our progress in the first half, as further net interest margin (NIM) expansion drove net interest income higher and we incurred significantly lower net impairment charges for the period,” said group chief executive Jamie Ling in a statement.
In a filing with Bursa Malaysia, AmBank said its focus moving into the second half of FY25 (2H25) would be on growing its loan book, particularly the small and medium enterprises as well as the mid-corporate segments while repositioning its retail banking business.
For 1H25, AmBank posted a net profit of RM1bil or an earnings per share (EPS) of 30.27 sen, a jump of 18% on-year from RM848.15mil net profit or an EPS of 25.64 sen in made for the same period last year, while revenue gained 3% year-on-year (y-o-y) to RM2.41bil from RM2.33bil previously.
For the second quarter (2Q25), AmBank recorded a net profit of RM500.57mil or an EPS of 15.14 sen, which was 6.6% higher y-o-y than the RM469.78mil or EPS of 14.2 sen it posted in the same corresponding quarter of FY24.
Turnover for the quarter climbed 9.3% y-o-y to RM1.23bil from RM1.12bil in 2Q24.
The group declared an interim dividend of 10.3 sen per share, with an ex-date of Dec 12, 2024, and payable on Dec 30, 2024.
According to AmBank’s statement, net interest income (NII) for 1H25 rose 6.5% year-on-year (y-o-y) to RM1.76bil on the back of a 14 basis points NIM expansion to 1.93% as well as loan and financing growth.
Non-interest income (NOII), however, was 3.9% lower y-o-y to RM644.9mil due to the non-repeat AmGeneral Insurance divestment gains of RM51.1mil and lower trading gains from group treasury and markets.
Overall expenses rose 5% y-o-y to RM1.05bil while cost-to-income rose marginally to 43.6% from 43%.
Meanwhile, total gross loans, advances and financing remained flat year-to-date at RM134.5bil and total customer deposits fell 4.3% year-to-date to RM136.3bil as the group further managed its cost of funds.
AmBank revealed that its gross impaired loans, advances and financing (GIL) ratio remained stable at 1.67% with a loan/financing loss coverage including regulatory reserves of 102.1%.
The group also maintained a good liquidity coverage ratio of 143.5%, while loan-to-deposit ratio was at 98.7%, compared with the 94.2% seen for the whole of FY24.
Time deposits remained flat at RM90.2bil while current accounts-savings account (CASA) deposits decreased 12.7% year-to-date to RM46.1bil and the CASA mix declined to 33.8% from 37.1% in FY24.
According to Ling, AmBank’s lending growth in its focused segments is strong, and the group’s overall return on equity is above 10%.
“Our capital position has strengthened further with RM1bil in profit accretion, as well as from the adoption of the Foundation Internal Ratings-Based this quarter.
“We are pleased to declare a 71.7% increase in interim dividend for the first half of the financial year ending 2025,” he said.
AmBank reported that the net profit for its retail banking segment increased by RM55.1mil or 39.8% y-o-y to RM193.5mil, mainly from lower net impairment, which was partially offset by lower income and higher operating expenses.
“Income fell marginally to RM952.1mil due to a 3.4% y-o-y decline in NII, attributable to margin compression from mortgage and auto financing, but partially offset by a 15% y-o-y growth in NoII,” it said.
Meanwhile, net earnings for its business banking segment increased by RM106.1mil or 55.8% y-o-y to RM296.1mil mainly due to higher income, lower operating expenses and lower net impairment.
“Income grew 15.7% y-o-y to RM642.4mil driven by a 16.3% growth in NII from strong loan growth and a 13.9% growth in NoII from higher loan-related fees. Operating expenses were 0.4% lower y-o-y at RM188.4mil,” the lender added.
Ling pointed ou that there is much to be done, emphasising on the group’s focus on executing its “Winning Together 29” (WT29) plans.
WT29 is the bank’s new corporate strategy that was launched at the start of the current financial year.
It aims to raise the group’s returns and valuation by deepening relationships through acting as an adviser and being a trusted business partner to its customers.
Besides growing its loan book, AmBank said its focus for the rest of the financial year would also be on building and expanding its wealth management propositions as well as developing efficient supply chain solutions for customers.
Through digitalisation efforts, the group reiterated its commitment to improving customer experience via enhanced process efficiency and customer-focused productivity tools.
Of interest, the lender projected industry loans growth to remain within the 5% to 6% range, given the promising gross domestic product growth forecast for this year from the recent Budget 2025 announcements.
“The overall banking system remains highly liquid, reflected by the liquidity coverage ratio of 148.03% in September. The loan-to-fund ratio and loan-to-fund-and-equity ratio remain stable at 83.8% and 72.98% as of the month,” said AmBank.
In line with Malaysia’s improving economic prospects, Ling is keeping a positive stance over the bank’s FY25 outlook.
