AMMB Holdings Bhd registered a higher income of RM1,014 million, up 3.2% supported by higher net interest income (NII) (+4.7%). Net interest margin (NIM) stable at 2.02% in the first quarter ended 30 June 2018 (Q1FY19).
Datuk Sulaiman Mohd Tahir, AmBank Group Chief Executive Officer said, “After a year of putting in place a series of fundamental changes, we have today a solid platform to grow further, as our Q1FY19 results point to a reasonable start to the new fiscal year. Our Q1FY19 income growth was broad based. NIM remained stable at 2.02%.”
“Our operating leverage improved with CTI of 50.6%. We saw a strong pre-provision profit growth of 16.7% compared to 3.2% in Q1FY18. At RM501 million, this is the highest PBP recorded since Q4FY15, a testament to the strength of our Top 4 strategy. Credit costs were still negligible considering our asset base. Overall, we recorded higher profitability and improved returns in Q1FY19.”
“NII continued to grow steadily at 4.7% YoY to RM642 million, paced by the consistent loans growth of 2.2% on a year-to date (YTD) basis with good traction in our targeted segments. Non-interest income (NoII) was flat YoY at RM372 million. Wealth Management fee income continued to increase with a 8.7% growth YoY coupled with improved performance from our Insurance business, mitigating Global Markets and Investment Banking results which were impacted by weaker market sentiments.”
He said that as a result of their concerted efforts over the past year to implement a philosophy of stronger cost discipline, expenses were down 7% YoY to RM513 million. Its cost base is now leaner following the completion of the Mutual Separation Scheme (MSS).
“Other operational expenses were also reduced as we continue to manage costs diligently through BET300, our 3-year business efficiency transformation aimed at achieving RM300 million gross cost savings across the Group. CTI was lower at 50.6% with positive JAWS of 10.5%.”
“Our credit cost continued to normalise. We recorded a net debt charge of RM7 million, still a negligible amount against a gross loan base of RM98.4 billion. Our asset quality remained resilient with higher LLC3 of 106.3% and GIL ratio at 1.77%.”
Speaking on loans growth, Sulaiman said that, “We continue to see good loans growth in our targeted segments. Mortgage loans maintained its growth momentum and expanded by 4.8% YTD to RM27.7 billion. Loans to small and medium enterprises (SME) grew 2.8% YTD to RM17.2 billion. Card receivables were up 4.3% to RM2.1 billion. All in all, we are encouraged by the 8th consecutive quarter of loans growth.”
“Our customer deposits grew 2.9% YTD to RM98.6 billion whilst our current accounts and savings accounts (CASA) increased by 2.1% YTD. We remain focused on driving CASA as well as Retail and Business Banking deposits to improve our funding resiliency. Our retail deposit mix increased to 53.9% from 51.5% on 31 March 2018. Our CASA composition stood at 21.1%.”
“On liquidity, our banking subsidiaries have maintained liquidity coverage and net stable funding ratios (NSFR4) above 100%. Our capital levels were adequate with CET1 Capital ratio at 11.6%, up 30 basis points (bps) from 31 March 2018 whilst Total Capital ratio stood at 16.4%, down 20 bps.”
“The Group adopted Malaysian Financial Reporting Standard 9 on Financial Instruments (MFRS 9) on 1 April 2018. The impairment assessment under MFRS 9 is based on the expected credit loss model, which uses forward-looking assumptions, as opposed to MFRS 139, the preceding accounting standard, which based impairment assessment on an incurred loss model. The Day-1 (i.e. on 1 April 2018) impact to the Group’s capital position was broadly neutral.”
Commenting on the highlights for Q1FY19, Dato’ Sulaiman said that, “We have just established an e-payment partnership with Digi as we continue to step up to our digital offerings in line with our efforts to drive digital transformation. This strategic tie-up allows our card merchants to accept Digi’s vcash QR code as an additional payment service. Apart from enabling our merchant point-of-sale (POS) terminals to accept vcash QR code transactions, Digi will also be signing up SME merchants under the Master Merchant programme with AmBank to enlist more merchants to accept vcash payments.”
“On the environmental, social and governance (ESG) front, I am pleased to share that AmBank Group has been included as a constituent of the FTSE4Good Index Series in July 2018. This recognition reflects our commitment in advocating strong ESG practices in our day-to-day operations.”
