AMMB’s net profit declines to RM365.17m for 1QFY2021

by BERNAMA/ pic by BLOOMBERG

AMMB Holdings Bhd’s net profit declined to RM365.17 million for the first quarter ended June 30, 2020 from RM391.46 million in the same period last year.

Revenue eased to RM2.21 billion from RM2.39 billion previously.

In a filing with Bursa Malaysia, the bank attributed the weaker performance to the COVID-19 pandemic and Movement Control Order (MCO) which suspended many business operations, coupled with rapid monetary easing, resulting in the narrowing of margins for banks.

Effective April 1, 2020, banking institutions are required to provide an automatic deferment of all loan/financing repayments (except for credit card balances) for a period of six months, resulting in a net loss of RM57.5 million during the quarter under review.

Apart from this, the group provided Special Relief Facility (SRF) financing at a concessionary rate to assist SME businesses adversely impacted by the COVID-19 pandemic whereby RM751 million of loans have been approved under the SRF scheme to its customers, with RM585 million in loans disbursed to date.

“With further reductions in the Overnight Policy Rate (OPR) to support the economy and ample liquidity in the banking system, net interest margin compressed further and as a result, net interest income fell 8.3 per cent year-on-year (YoY).

“Excluding the net modification loss resulting from the sector-wide measures to temporarily defer monthly loan repayments, underlying net interest margin (NIM) was 1.74 per cent, down 13 basis points YoY,” it said.

Moving forward, AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir said while there would be downside risks, the bank is confident that this would be cushioned by the swift introduction of fiscal stimuli and financial measures aimed at supporting economic growth, while more stable commodity prices and the current staggered relaxation of the MCO should gradually improve business and consumer sentiments.

“While we acknowledge that COVID-19 poses significant risks, it has also presented the opportunity for us to reassess our position and further strengthen our core operations.

“In line with the second phase of our BET programme, we will continue to review and streamline our business processes through an accelerated focus on digitalisation efforts, robotics and automation initiatives as well as following through our commitment to shaping an agile work culture,” he added.