KUALA LUMPUR (Feb 27): AMMB Holdings Bhd said its net profit rose 9.2% to RM382.15 million or 12.71 sen per share in the third quarter ended Dec 31, 2019, from RM349.88 million or 11.63 sen per share in the year-ago quarter.
Quarterly revenue rose 3% to RM2.37 billion from RM2.30 billion previously, the group’s stock exchange filing today showed.
For the nine-month period, AMMB said its net profit increased 4.5% to RM1.09 billion, from RM1.05 billion in the corresponding period a year ago. Cumulative revenue grew 4.8% to RM7.11 billion from RM6.79 billion.
AMMB said during the period, fund-based income from interest bearing assets increased mainly from interest on fixed income securities and customer lending, whereas non-interest income recorded substantial increase compared with the same period last year.
Interest income from securities grew mainly from hold to collect and sell securities, and interest income from customer lending increased from term loans, trade financing and mortgages offset by reduction from hire purchase.
Fee-based income recorded an increase of RM42.3 million, while market-based income increased from gains on trading/liquidation of securities and revaluation of trading securities offset by decrease in gain from trading in foreign exchange. Decrease in other income was attributable to a significant gain on disposal of foreclosed property in prior period, it said.
Net income from insurance business decreased mainly due to higher commission expense and insurance claims despite an increase in net earned premium, AMMB added.
AMMB’s share of profits from associates and joint ventures reduced mainly due to the insurance-based joint ventures which recorded higher reserving mitigated by higher investment and trading income from revaluation of securities.
Overall, the group's cost-to-income ratio improved to 49.6% from 51.6% a year ago. Impaired loans ratio stood at 1.7%.
“Deposits from customers was lower compared to March 31, 2019 at RM105.7 billion. Low cost deposits constituted 23.4% of total deposits from customers, a marginal increase compared to 23.3% as at March 31, 2019,” it added.
AMMB said for the year ahead, loans are projected to grow around 4.3% — versus 3.9% in 2019 — based on the view that the country’s gross domestic product will continue to expand moderately by 4.2%.
The group sees another 25 to 50 basis points (bps) cut from the current overnight policy rate of 2.75% on the cards.
Should there be a 50bps cut, it is unlikely for the economy to experience “negative real returns”, it added.
The group said it will continue to drive its income growth momentum, especially in the areas of transaction banking, foreign exchange, SME and wealth management.
It also aims to focus on its digital transformation investment plan in FY20 to pave way for the digitalisation of its products and solutions to capture alternative sources of business and drive internal efficiencies.
Shares in AMMB were unchanged at RM3.78 at 3.43pm, valuing the banking group at RM11.39 billion.