KUALA LUMPUR: AMMB Holdings Bhd’s (AmBank) net profit rose 9.23 per cent to RM382.15 million in the third-quarter (Q3) ended December 31, 2019 from RM349.86 million recorded a year ago.
AmBank group’s revenue for the period increased 4.3 per cent to RM2.4 billion from RM2.3 billion previously.
In an exchange filing today, AmBank said this was due to higher fund based income from interest bearing assets including fixed income securities and customer lending.
For the first-nine months ended December 31, 2019, AmBank’s net profit rose 3.8 per cent to RM1.09 billion from RM1.05 billion, while revenue surged 4.9 per cent to RM7.12 billion from RM6.79 billion recorded a year ago.
Group chief executive officer Datuk Sulaiman Mohd Tahir said the banking group had stepped up its revenue growth momentum to record a robust 9.1 per cent growth year-on-year (YoY) in total income.
This was a result of net interest income growth, strong trading gains and investment income as well as higher investment banking fee income.
“It was testament to our strict cost discipline, we were able to make notable progress in cost efficiency, achieving a cost-to-income ratio of 49.6 per cent compared with 54.3 per cent in FY19. As a result, we delivered strong profit before provision growth of 13.5 per cent,” Sulaiman said in a separate statement.
He said the Covid-19 outbreak was likely to have some dampening impact on the economy, particularly in the areas like services and tourism-related sectors.
On the monetary front, Sulaiman said Bank Negara Malaysia’s overnight policy rate cut to 2.75 per cent in January should provide positive impetus to the economy and the capital market.
“In tandem with a moderate economic outlook, the banking system loans growth is expected to grow around 4.3 per cent for the calendar year 2020,” he added.
AmBank group’s income for Q3 increased 16.6 per cent YoY, propelled by better lending growth and stronger trading and investment income.
Net interest margin (NIM) expanded by 11 basis points to 2.02 per cent.
During the nine-month period, the group’s net interest income (NII) increased 6.1 per cent to RM2.07 billion, underpinned by consistent assets growth while NIM of 1.93 per cent was stable YoY.
Its non-interest income (NoII) of RM1.17 billion represented a 14.9 per cent increment YoY. This was largely aided by stronger trading income and investment income from group treasury and markets and general insurance, as well as higher fee income from investment banking and funds management.
AmBank achieved targeted gross cost savings of RM300 million as part of its BET300 efficiency programme launched in FY18.
The group recorded a net impairment charge of RM133.5 million compared to a net recovery of RM33.4 million in the same period last year.
This was mainly due to provisions on several newly impaired wholesale banking and business banking loans, coupled with lower recoveries post retail debt sale.
The group’s gross impaired loans ratio stood at 1.71 per cent with loan loss cover at 105.2 per cent (FY19: 114.0 per cent).
Gross loans increased 4.2 per cent YoY and 2.7 per cent year-to-date (YTD) at RM104.5 billion, boosted by higher disbursements in Q3.
Excluding auto financing, gross loans expanded 5.1 per cent YTD.
Mortgage loans increased 5.1 per cent YTD to RM35.9 billion while loans in the retail small medium enterprise and business banking segments grew strongly by 24.6 per cent and 8.9 per cent respectively.
Total customer deposits stood at RM105.7 billion, a decrease of 1.0 pe cent YoY and 1.1 per cent YTD.