KUALA LUMPUR (Feb 25): AMMB Holdings Bhd reported a nearly 53% jump in net profit for the third quarter ended Dec 31, 2021 (3QFY22) to RM403.29 million against RM263.83 million in the previous corresponding quarter despite higher loan provision caused by exposure to the local oil & gas (O&G) industry.

A tax credit amounting to RM234 million was booked in 3QFY22, which helped lift the banking group's quarterly net profit that would have been dragged down by higher net impairment charge of RM337 million, AMMB's presentation notes on its quarterly results showed.

According to analysts who attended the group's quarterly results briefing, a big portion of the loan provision was the results of the lending to Serba Dinamik Holdings Bhd.

Analysts were guided that the group is expecting more provision in the following financial quarter for its exposure to another local O&G entity.

The banking group's quarterly revenue went up marginally to RM1.183 billion from RM1.176 billion, according to AMMB's filing with the bourse.

Earnings per share expanded to 12.18 sen in 3QFY22 from 8.77 sen a year earlier.

The banking group’s quarterly revenue went up marginally to RM1.183 billion from RM1.176 billion, according to AMMB’s filing with the bourse. 

On a quarterly basis, AMMB's net profit grew 25.6% from RM321.04 million in 2QFY22, as revenue grew 5.54% from RM1.12 billion.

For the cumulative nine months ended Dec 31, 2021 (9MFY22), the banking group's net profit increased 28.2% to RM1.11 billion from RM866.31 million. Its 9MFY22 revenue was up 3.47% to RM3.54 billion versus RM3.42 billion in the prior year.

"The group recorded a higher total income of RM3.54 billion, up 3.5% year-on-year (y-o-y). NII (net interest income) grew by 15.5% y-o-y on the back of 6.6% loan growth while NIM (net interest margin) was higher at 2.06% (9MFY21: 1.85%). Reflective of the group's cost discipline, overall expenses fell 4.4% y-o-y to RM1.54 billion," said AMMB in a separate statement.

Furthermore, cost-to-income ratio also improved to 43.4% from 47% a year ago, registering a positive JAWS of 7.9%. Consequently, profit before provision grew 10.4% y-o-y.

Gross loans and financing grew 4% or RM4.5 billion year-to-date (YTD) to RM119.3 billion with growth seen across diversified segments as economic recovery gained momentum in this quarter.

Retail banking loans remained the main driver of the group. AMMB's retail loan portfolio increased by RM2.7 billion primarily contributed by mortgage loans as well as personal financing, offset by a reduction in auto finance. This was followed by wholesale banking and business banking loans, which went up by RM1.1 billion and RM792 million respectively.

"Deposits from customers increased by 3.5% YTD to RM124.7 billion. Time deposits increased 3% YTD with CASA (current account/savings account) balances up by 4.6% to RM37.4 billion. CASA mix was higher at 30% (FY21: 29.7%). Importantly, the group remains highly liquid, with a liquidity coverage ratio of 164% as at Dec 31,  2021," said AMMB.

AmBank Group chief executive officer, Datuk Sulaiman Mohd Tahir, said AMMB continues to be proactive and prudent in managing risks with pre-emptive provisions against certain loan portfolios. Total overlay reserves were retained at RM945 million compared with RM900 million last quarter. 

He highlighted the group's annualised return on equity at 9.2%, an improvement from 6% a year ago.

"Given the disruptive nature of changes impacting all of us, it is imperative for the banking sector to home in on the need to address global sustainability challenges. The sector can indeed make a tangible difference in society as well as the environment. To this end, AmBank Group held its inaugural ESG day on Jan 12, 2022 to engage with customers and investors on the group's environmental, social and governance (ESG) journey.

"Themed 'Forward Thinkers: Journeys That Converge', the ESG day saw us communicating our sustainability road map to stakeholders and reaffirming our commitment to integrating ESG considerations into its strategies, businesses and operations," he added.

AMMB's share price gained five sen to reach RM3.35 as at the noon break, with a market capitalisation of RM11.1 billion.