AMBANK Q3 NET PROFIT FALLS 30.96PC
Group not proposing any final dividend for the year following its 1MDB settlement
AMMB Holdings Bhd’s (AmBank Group) net profit fell 30.96 per cent to RM263.83 million in the third quarter ended Dec 31, 2020, from RM382.15 million a year earlier.
AmBank Group said its revenue had fallen 11.81 per cent to RM2.09 billion from RM2.37 billion in the third quarter of 2019 due to lower interest on deposits from customers, deposits and placements from banks and other financial institutions and recourse obligation on loans and financing sold to Cagamas Bhd.
For the nine months, the group’s net profit shrank to RM866.315 million from RM1.09 billion last year due to higher impairment charges.
It posted a revenue of RM6.44 million, down 9.4 per cent from the same period in 2019.
Group chief executive officer Datuk Sulaiman Mohd Tahir said it would not propose any final dividend for the year ending March 31, 2021, following its global settlement with the government over the 1Malaysia Development Bhd scandal.
AmBank Group had agreed to pay RM2.83 billion to settle all outstanding claims and actions in relation to its involvement in the scandal.
“While this will have a material impact on the group’s fourthquarter financial year 2021 earnings and consequently 2021 results, it is important to note that we have adequate capital buffers to absorb the global settlement without an immediate need to raise additional equity capital.
“However, as a consequence of the settlement, the group will not propose any final dividend for financial year 2021,” said Sulaiman.
Elaborating on the results, AmBank Group said its net interest income (NII) of RM2.13 billion in the third quarter was three per cent higher than a year ago.
Excluding net modification loss, its NII increased 3.7 per cent, driven by 4.4 per cent loans growth year-to-date.
However, the group said net interest margin had contracted 8.0 basis points (bps) to 1.85 per cent year-on-year, from the impact of the cumulative 125 bps reduction in the Overnight Policy Rate during the year.
The group’s gross impaired loans ratio remained at 1.73 per cent, with a loan loss coverage ratio of 103.4 per cent.
“Gross loans and financing grew 4.4 per cent year-to-date to RM111.9 billion, driven by growth in retail banking and business banking.
“Mortgages grew RM2.6 billion to RM39.1 billion and loans to small and medium enterprise customers increased by RM1.4 billion to RM22.3 billion while wholesale banking loans fell by RM1.07 billion from lower corporate utilisation.”
Group customer deposits grew 5.4 per cent year-to-date to RM119 billion, with current account and savings account (CASA) balances up 16.1 per cent (CASA mix higher at 28.1 per cent).