KUALA LUMPUR: AMMB Holdings Bhd (AmBank Group) expects profit after tax and minority interest (Patmi) to grow by 8% for its financial year ending March 31, 2015 (FY15), amid an increasingly challenging and competitive financial environment.

“In the first half [of FY15], we saw an 8.9% growth in patmi which included divestment gains [from the stake sale in AmLife Insurance Bhd and AmFamily Takaful Bhd],” its group managing director Ashok Ramamurthy told a media briefing yesterday.

However, it is expected to see lower patmi growth in the second half of FY15.

“Since our full-year guidance is 8%, logically speaking our second-half growth would be lower. However, we are committed to our FY15 to FY17 strategic agenda,” said Ashok.

AmBank Group has set several key performance indicators for FY15 including a 14% return on equity (ROE), 1.9% in gross impaired loans and a cost-to-income ratio of 43%.

For FY16 and FY17, Ashok said the group is forecasting a patmi growth of between 6% and 10%.“We have slightly lowered our expectations as we think the environment is getting to be more challenging. There are more global headwinds which will affect the way we manage our business here in Malaysia,” he said.

In terms of what would be driving growth, Ashok said the group would continue building its retail portfolio and deposits at a faster pace. In wholesale banking, he said there needs to be more momentum built in terms of financing and loans.

For the second financial quarter ended Sept 30, 2014 (2QFY15), the group’s net profit rose 1.2% to RM445.8 million, from RM440.9 million a year earlier, on lower operating and acquisition expenses.

Higher contributions from the financial services provider’s associates and joint ventures, besides foreign exchange gains, had also supported profit growth during 2QFY15. Revenue fell to RM2.21 billion, from RM2.38 billion.

The group is proposing an interim dividend of 12 sen a share for FY15. For the six months period, first half of FY15 (1HFY15), AmBank Group’s net profit increased to RM982.8 million, from RM902.8 million in the previous corresponding period.

This article first appeared in The Edge Financial Daily, on November 20, 2014.