AMMB Holdings Bhd, which announced the financial results for the nine months ending Dec 31, 2017, announced that its total income was up 5.4% to RM2,908.4 million, mostly underpinned by good growth in net interest income (NII) (+8.8%). 

It also reported a net profit after tax and minority interests (PATMI) at RM878.7 million. 

Datuk Sulaiman Mohd Tahir, AmBank Group Chief Executive Officer said, “The NII increased by RM149.0 million (+8.8%) mainly from customer lending and interest on fixed income securities. 

“The 5.4% YoY growth in total income was underpinned by consistent growth momentum in NII. Interest income from customer lending was boosted by several factors, primarily, robust growth recorded in residential mortgages as well as increased interest income from securities. In addition, cost of funds was lower mainly as a result of the repayment of medium term debt and from diversifying our funding sources towards Retail deposits”

“Given our appointment as Amanah Saham Nasional Berhad’s agent, fee and commission income from unit trust increased 20.7% YoY propelled by higher commission earned from the sale of unit trust. Investment and trading income was slightly impacted by lower foreign exchange income. In addition, last year’s results included a significant fixed income trading gain. Other income increased 90.1% YoY.”

Sulaiman added, “Our loans and financing base expanded 4.1% YTD since 31 March 2017 to RM94.7 billion supported by consistent growth in our targeted segments. Mortgage loans grew 16.4% YTD or by RM3.6 billion to RM25.5 billion while SME loans grew a robust 12.4% YTD or by RM1.7 billion to RM15.8 billion. Our credit card receivables also recorded double digit growth of 13.3% YTD to RM1.9 billion.” 

“As a result of our strategic focus on accelerating the growth of our higher margin products, the optimisation of our funding mix as well as the diversification of our portfolio, NIM has improved to 1.98% from 1.96% a year ago.

Deposits from customers increased RM6.0 billion or 6.4% YTD to RM99.9 billion. This was predominantly driven by the diversification of our customer base to enhance funding resiliency. Current accounts and savings accounts (CASA) which collectively make up our lower cost deposits, expanded by 0.8% YTD. CASA composition at 20.0% due to our enlarged deposit base.”

“CTI stood at 58.2%. The increase in expenses was largely attributable to investments in new capabilities and compliance. Personnel cost increased by RM73.2 million (+8.5% YoY) mainly from expansion of our new growth segments and salary increment. General administrative expenses were higher driven by compliance initiatives and also a one-off charge for Retail operational losses.” 

“As guided previously, we expect credit costs to normalise. For 9MFY18, the Group recorded an annualised credit cost of 0.04% attributable to higher allowance for certain individually assessed borrowers and lower recoveries mitigated by lower allowance provided on collective basis. Loan loss coverage was higher at 101.6% while GIL ratio improved to 1.77% as compared to 1.86% as at 31 March 2017. 

On liquidity and capital, our banking subsidiaries maintained liquidity coverage ratios in excess of the regulatory minimum requirements. The Group's aggregated capital adequacy ratio remains adequate at 16.1%.”

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