AMMB's 2Q profit falls, pays 5 sen dividend

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KUALA LUMPUR (Nov 19): AMMB Holdings Bhd's second quarter net profit declined 14% from a year earlier as net interest, Islamic banking and insurance income fell.

In a statement to Bursa Malaysia today, AMMB said net profit fell to RM382.52 million in the second quarter ended Sept 30, 2015 (2QFY15), from RM445.82 million. Revenue was lower at RM2.09 billion, compared to RM2.21 billion.

AMMB's income statement showed net interest and Islamic banking income dropped to RM431.77 million and RM200.16 million respectively. Net insurance income declined to RM100.81 million.

For the cumulative six months ended Sept 30, the group's net profit fell to RM722.03 million, from RM982.76 million a year earlier. Revenue decreased to RM4.2 billion, from RM4.79 billion.

According to AMMB, loans fell to RM86.8 billion as at Sept 30 this year, from RM87.8 billion as at March 31.

"This was mostly due to reduction reported from hire-purchase receivable, term loans, credit card receivables, trust receipts and overdraft," the group said.

Despite posting lower profit, AMMB said it planned to pay a dividend of five sen a share for the quarter in review. The ex-date falls on Dec 2 this year.

Looking ahead, AMMB said the banking sector was expected to "experience slower demand and narrowing net interest margins", amid moderate private consumption growth.

AMMB said it would stay focused on organic growth and optimise efficiency to sustain its financials.

In a separate statement, AMMB's acting group managing director Datuk Mohamed Azmi Mahmood said the group's organic growth plan involved the expansion of its retail customer base.

Mohamed Azmi said AMMB hoped to secure more young professionals as its clients.

"On our effort to continue to optimise efficiency, the group is well on its way to deliver better customer experience via process simplification and concurrently upgrading the collection, cash management and transaction banking systems to increase productivity and improve processing," he said.

At 12:30pm, AMMB shares fell one sen or 0.2% to settle at RM4.65, for a market capitalisation of RM14.02 billion. The stock had fallen 30% this year, underperforming the FBM KLCI's 6% drop.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)