AmBank to be driven by net interest income
CEO expects earnings to improve on loan growth
KUALA LUMPUR: AMMB Holdings Bhd (AmBank) expects to maintain its income at the RM1bil mark for the third and fourth quarters of its financial year ending March 31, 2019 (FY19), driven by growing net interest income.
The group achieved an income of more than RM1bil for the third consecutive quarter, registering an income of RM2.02bil for the first half of FY19 (1H19).
AmBank group CEO Datuk Sulaiman Mohd Tahir expected earnings in 2H19 to be better than the same period last year.
“This is also due to the mutual separation scheme exercise which occured in 2H18.
“Loan growth for the second half of the financial year is projected at 6.5% to 7%, outpacing industry loan growth of an estimated 5%,” he said after the group’s 1H19 briefing here yesterday.
Going forward, AmBank’s loan growth will continue to be propelled by mid-sized corporations, and the retail small and medium enterprise (SME) and business banking segments.
In a bid to build up its retail current accounts savings accounts, AmBank planned to launch wealth-management platform DIY Wealth in the first quarter of 2019, which would be incorporated with robo-adviser and artificial intelligence elements.
AmBank registered a net profit growth of 5.5% to RM695.74mil in 1H19 compared with the same period last year.
The bank achieved an improved cost-to-income (CTI) ratio to 50.4% from 57.2% last year, in line with its BET300 target of a 55% CTI ratio.
On a year-to-date basis, gross loans and financing grew 3.8% to RM99.9bil, while customer deposits were up 5.2% to RM100.8bil.
On the retail front, mortgage loans grew 8.1% year-to-date to RM28.5bil, while card receivables grew 8.7% year-to-date to RM2.2bil.
AmBank’s overall loans to SMEs grew 8.3% year-to-date to RM18.1bil.
Its gross impaired loan ratio was at 1.72% and loan loss cover ratio at 111.3%.
Ambank’s aggregated banking entities’ common equity tier 1 (CET1) capital ratio was at 11.5%, on track to meeting its targeted CET1 ratio of 10.5% by end-FY19.
AmBank has declared an interim dividend of five sen per share.