Highlight AMMB 2Q profit up 16%, gives 7.2 sen dividend

Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 14 November 2013 13:57
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KUALA LUMPUR (Nov 14): AMMB Holding Bhd announced that its net profit for
the second financial quarter to Sept 30 (2Q14) rose 16% year on year to
RM441.2 million, from RM380.4 million a year ago.
Its second quarter revenue also rose to RM2.39 billion, from RM2.00 billion.
The major banking group declared an interim dividend of 7.2% (7.2 sen) per
share.
For the first half of the current financial year, its net profit rose to RM906.5
million, from RM823.3 million in the previous year’s first six months. Revenue
also rose to RM4.79 billion from RM4.02 billion.
In a filing with Bursa Malaysia, the group said earnings improvement was
broad-based across a few divisions in the current reporting quarter as
compared to the previous year corresponding quarter.
But AMMB said it reported a lower pre-tax profit of RM602.5 million for the
second quarter ended Sept 30, 2013, as compared to RM640.6 million for the
first quarter ended June 30, mainly due to “impairment on sundry receivables of
RM32.6 million as compared to write-back of RM8.2 million for the preceding
quarter”.
Reviewing the first half of its financial year, AMMB said the group’s earnings
grew 10.1% to RM907 million due to good income growth, integration of
acquisitions and lower allowances.
Ashok Ramamurthy, group managing director of AMMB said in a press
statement: “AMMB’s record half-year earnings was underpinned by
contributions from the two recent acquisitions and positive momentum in delivering on synergies.
“Key income drivers were commercial banking (+6%), insurance (+>100%) and investment banking (+1%). Non-interest income grew at a
healthy pace of 41% to now compose 37% of total income, reflecting cross-selling and collaborative efforts across the group. Our loans
growth was slower, as we were being selective in customer segments and economic sectors whilst we continue to experience good
deposit growth.”
He said the integrations of Kurnia and MBF Cards are progressing on track with integrations targeted to be completed by first half of
calendar year 2014.
Looking ahead, AMMB said it expects the domestic economy to grow 4.6% for the full year of 2013, and to pick-up in 2014 from improved
global trade, supported by private expenditure.
“With the economy expected to grow at a slower pace in the remaining 2013, combined with easing consumer spending from
rationalisation of subsidy and responsible lending measures to address household debts, loans growth could moderate,” it said. It also warned that the asset quality may come under pressure for potential capital flow risk and inflationary pressure, and margins will
remain under pressure.
“The group remains vigilant against the environment and will maintain our disciplined approach in executing to our strategic priorities,” it
said.