KUALA LUMPUR (June 29): AMMB Holdings Bhd (AmBank) expects a single-digit loan growth of 3% to 4% for the financial year ending March 31, 2021 (FY21), higher than the industry's growth of -2.5% to 0.4%.
The loan growth will be driven particularly by the small and medium enterprise (SME) segment.
For FY20, the bank posted a loan growth of 5%.
Speaking at a virtual press conference on its full-year results for FY20, AmBank group chief executive officer (CEO) Datuk Sulaiman Mohd Tahir said the target is, however, dependent on the system's growth as a whole such as the easing of the impact of the Covid-19 pandemic and the country’s economic recovery.
“We are aiming higher than the industry's growth and by segments that we want to grow, in particular SMEs. But I do not think we can grow as much as we like to,” he said.
Sulaiman noted that the outlook now appears to be “positive”, given the relaxation of the movement control order (MCO) as well as the various stimulus packages announced by the government and the moratorium reprieve.
“We certainly hope that it will be a V-shaped recovery. We see that some businesses have picked up and we see new applicants coming in from certain sectors, such as manufacturing, to buy machinery. We are seeing some positive signs and we hope that will continue,” said Sulaiman.
In terms of forecast growth for FY21 as well as key performance indicators (KPIs), its group chief financial officer (CFO) Jamie Ling said that “trying to predict the financial outcome at the moment is very difficult, given that the visibility is not there”.
“We would like to run neutral to slightly negative revenue to cost JAWS (income growth exceeding that of expenses) in FY21,” said Ling. Notably, the bank has been running on positive JAWs over the last three years. In short, this means that revenue has been growing faster than cost.
Ling noted that it could be likely that there will be a slightly negative JAWS as revenue figures will be tough in the first half of FY21. Thus, Ling said, AmBank's focus is to be vigilant around credit monitoring as well as stress testing.
Shares in AmBank closed five sen or 1.6% lower at RM3.08 today, valuing the bank at RM9.26 billion. The banking group was trading at a price-to-book value of 0.506 times.