Highlight AMMB 3Q profit rises 6.8% y-o-y; 9-month results within expectations

by **Cals** Mon 17 Feb 2014, 18:48

Highlight AMMB 3Q profit rises 6.8% y-o-y; 9-month results within expectations

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Monday, 17 February 2014 13:43

KUALA LUMPUR (Feb 17): AMMB Holdings Bhd posted a net profit of RM432.09 million for the third quarter ended December 2013, up 6.8% from RM396.21 million in similar quarter of previous year.

Earnings per share (EPS) for the quarter rose to 14.07 sen from 13.2 sen.

The rise in profit was achieved on the back of increased revenue of RM2.43 billion, compared to RM2.34 billion in previous year’s similar quarter.

For the cumulative three quarters to December 2013, net profit rose to RM1.33 billion, from RM1.22 billion in similar nine-month period in the last financial year.

EPS for the three quarters rose to 44.23 sen, up from 40.27 sen.

Revenue for the nine months in current financial year totaled RM7.21 billion, from RM6.36 billion.

Reviewing its results, AMMB said in its filing with Bursa Malaysia that higher profit for the quarter was due to lower expenses, lower impairments on sundry receivables and foreclosed properties, higher incomes from other operating income and net interest income.

For the nine months to December 2013, growth in retail banking (+15.2%) and general insurance (+54.8%) along with life assurance and family takaful (+>100%) had contributed to increase in profit.

The banking group said net lending for the nine months grew 4.3% with growth focused on selective customer segments and economic sectors; gross impaired loans was at 1.98%, loan loss coverage at 119.3% and loan loss charge at 0.01%.

It added CASA (low cost deposits) rose 12.4% to compose 20% of total customer deposits. Customer deposits grew 5.4%.

For the nine month period, the group achieve ROE of 14.2% (+0.2%), ROA of 1.45% (+0.07%) and EPS of 44.2 sen (+8.8%).

AMMB added capital of the aggregated banking entities are above regulatory minimum with CET-1 (common equity tier-1) at 9.2%, Tier 1 at 10.8% and total capital at 14.9%, in compliance with Basel III requirements.

Looking ahead, AMMB said: “We see some headwinds in the banking environment, with loans growth moderating in line with economic outlook and measures to address high household debts whilst margin remains under pressure from stiff price-based competition.”

In a quick comment at noon, Alliance Research said: “AMMB’s 9MFY14 came within our expectation and market consensus. Its net earnings for 9MFY14 rose by 9.0% y-o-y to RM1,329.6 million, accounting for 74.0% of our estimates and consensus earnings.”

“The higher profit was mainly boosted by 33.7% growth in non-interest income, reduced loan loss provision driven by sound asset quality and strong debt recoveries,” it added.

But the research house noted AMMB did not book in its exceptional gains arising from disposals of stakes in both AmLife and AmTakaful operations to Metlife as the transaction is pending regulatory approvals.