IMPROVED PERFORMANCE
Result is 1.6pc higher than same period last year and beats Bloomberg’s estimate
AMMB Holdings Bhd is starting to see some momentum in its growth, with a higher net profit of RM328.27 million in the first quarter that beats Bloomberg’s estimate.
AMMB Holdings Bhd, which scrapped its merger deal with RHB Bank Bhd, is starting to see some momentum in its growth earnings.
Supported by its business and transaction banking, global markets and mortgages, the banking group registered a net profit of RM328.27 million in the first quarter ended June this year, 1.6 per cent higher than RM323 million in the same period a year ago.
Although the net profit rise was marginal, the result beat Bloomberg’s estimate by 5.22 per cent.
Bloomberg estimated RM312 million in net profit for AMMB.
Chief executive officer Datuk Sulaiman Mohd Tahir said it will maintain its focus on the group’s strategic priorities involving accelerated penetration into targeted segments and expansion in areas where it is already strong.
“We will focus on the growth of quality assets, our deposit mix, maximising fees as well as optimising and improving our riskadjusted returns.
“Our current initiatives involve improving our operational efficiency via faster loan approval turnaround time and automating our collection process in the first quarter of next year,” he said.
The bank’s revenue of RM2.08 billion in the quarter was higher than RM2.06 billion in the corresponding period last year.
Meanwhile, AMMB posted a higher net interest income of 8.4 per cent while net interest margin stood at 2.02 per cent for the quarter, driven by lending growth in targeted segments.
Its cost-to-income ratio stood at 56.3 per cent, which was unchanged from last year, and its gross loans and financing grew two per cent year-to-date to RM92.8 billion.
Total income of its new business banking division grew 17 per cent year-on-year to RM60.1 million while wholesale banking grew 9.1 per cent to RM343 million in total income.
Retail banking posted a modest growth in total income of 2.4 per cent year-on-year to RM351.9 million.
Public Investment Bank said although the planned merger with RHB Bank was called off, AMMB was starting to see some momentum in its growth aspirations, some of which include improving margins on a sequential basis as a result of its targeted loans mix and active management of its funding mix and deposit costs, and sustainable fee income in its wealth management and banc-asssurance segments, among others.
“While we still see competitive challenges ahead given the crowded space it is headed to, we remain positive on the group’s medium-term prospects underpinned by these strategic initiatives,” it said.
PublicInvest has reiterated a “buy” call on AMMB with an unchanged target price of RM5.40.