Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 22): AMMB Holdings Bhd (AmBank)'s net profit fell 4.86% to RM323 million in the first quarter ended June 30, 2016 (1QFY17) from RM339.51 million, while its net income was flat at RM2.06 billion versus RM2.11 billion in the previous year.

In a bourse filing today, the group said the reduction in earnings was mainly due to higher other operating expenses, decrease in net interest income and Islamic banking business by RM50.6 million, RM31.2 million and RM9.8 million respectively.

Also, lower income was reported from other operating income and higher taxation by RM8.8 million and RM6.2 million respectively. The group's financial investments also reported higher impairment loss of RM1.1 million compared to1QFY16.

On its divisional performance, the group's retail banking total income fell 16.7% year-on-year (y-o-y) as a result of margin compression despite higher fee income and a high base due to a non-recurring gain from disposal of investment last year.

Wholesale banking's total income increased 5% y-o-y to RM361.7 million on higher loan and advisory fees, and wealth management fees.

The net profit of the group's general insurance increased 26.7% to RM74.6 million aided by lower claims from improved claims management.

Meanwhile, its joint venture of Life Assurance and Family Takaful registered a small profit for the quarter on the back of higher gross premium.

Although the group's net profit fell slightly y-o-y, AmBank group chief executive officer Datuk Sulaiman Mohd Tahir said in a statement today, the group has seen stabilising margins on a quarter-on-quarter basis while the group cost control showing through and credit quality has held up with improvement in retail from lower allowances.

On the outlook for the coming financial year, Sulaiman expects both loans and deposits to grow at a more moderate pace amid current business and economic conditions.

He also expects credit costs to normalise and, potentially, some sector-specific stress.

"We have a sound balance sheet and overall asset quality remains healthy though we are keeping a watchful eye on some sectors," he added.

He also said the group will focus on delivering its Top 4 Strategy, which is showing some early results.

"With the support from the group, people and stakeholders, I am positive that we can achieve our aspirations," he added.

At 12.30pm, AmBank was unchanged at RM4.40, for a market capitalisation of RM13.26 billion.

 

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