AmBank Group posts RM3.83bil net loss in FY21

KUALA LUMPUR: AMMB Holdings Bhd's (AmBank Group) registered a net loss of RM3.83 billion in the year ended March 31 2021 (FY21), from net profit of RM1.34 billion previously.

The group said its revenue dropped 9.8 per cent to RM8.41 billion from RM9.32 billion in FY20.

AmBank group chief executive officer Datuk Sulaiman Mohd Tahir said against a challenging economic backdrop, itsvfinancial results were materially impacted by one-off exceptional items and higher impairment charges due to the lingering effects of the Covid-19 pandemic on the economy. 

"Net profit, excluding the exceptional items and related legal and professional expenses, of RM961.6 million was 28.3 per cent lower year-on-year (yoy) as a result of increased overlay provisions," said Sulaiman. 

For FY21, the group's total net income grew 7.7 per cent to RM4.55 billion.

Net Interest Income (NII) of RM2,935.4 million was 5.8 per cent higher yoy on the back of 7.0 per cent loan growth. 

However, the group said its net interest margin (NIM) contracted 3 bps to 1.91 per cent yoy, due to margin compression resulting from the cumulative 125 bps reduction in overnight policy rate (OPR) in 2020, offset by margin recovery in second half of FY21 from effective asset and liability management.

"Non-interest income (NoII) grew 11.3 per cent yoy, largely attributable to strong trading, investment and insurance income from group treasury and markets, general and life Insurance, as well as higher fee income from fund Management and stockbroking," it said.

The group said its gross loans and financing increased 7.0 per cent yoy to RM114.8 billion, driven by growth in Retail Banking and Business Banking and outpacing industry's growth of 3.0 per cent. 

"Mortgages grew RM3.6 billion to RM40.1 billion and loans to small and medium enterprises (SME) customers increased by RM2.0 billion to RM22.8 billion," it said. 

The group's registered a net loss of RM4.69 billion in the fourth quarter (Q4) from RM247.54 million net loss a year ago.

Group revenue slipped 12.18 per cent to RM1.97 billion in Q4 from RM2.21 billion last year. 

On its prospect, Sulaiman said the group would focus on strengthening its balance sheet, customer debt rehabilitation, maintaining higher liquidity buffers as well as driving further cost efficiencies.

He said while FY21 had brought about some challenges to Ambank Group, it had allowed the group to move forward without any impediments, to realise its full potential. 

"We have shown resilience and determination and with the past behind us, we can continue our focus on our growth," he added.