AmBank’s net profit up 35.5% in 2QFY22

Revenue for the quarter, however, dropped by 3% to RM1.12b 

by ASILA JALIL / pic by MUHD AMIN NAHARUL

AMMB Holdings Bhd will expand the size of its Current Account Saving Account (CASA) and capital-light revenues across its channels in 2022 with particular focus on targeted segments such as small and medium enterprises (SMEs) and mid-corporate. 

AmBank Group CEO Datuk Sulaiman Mohd Tahir (picture) said the bank is aware of the need for it to play a role in the nation’s economic revitalisation as more businesses are resuming during the economic recovery period. 

“The group continues to contribute in this regard via strategic programmes that provide SMEs with financing as well as solutions beyond financing including providing avenues for SMEs to adopt digitalisation measures to propel their businesses,” he said in a statement recently. 

AmBank’s net profit for the second quarter ended Sept 30, 2021 (2QFY22), rose 35.3% year-on-year (YoY) to RM 321.04 million from RM237.32 million registered a year prior due to lower impairment charges. 

Revenue for the quarter dropped by 3% to RM1.12 billion from RM1.15 billion in 2QFY21.

For the first half ended Sept 30, 2021 (1H22), the group’s net profit was up by 17.5% YoY to RM707.64 million from RM602.48 million in 1H21. 

Revenue for the period rose 5% to RM2.36 billion from RM2.25 billion in the corresponding period last year driven by higher net interest income (NII) from both loan growth and net interest margin (NIM). 

NII grew 19.5% YoY on the back of 4.5% loan growth while NIM was higher at 2.1% from 1.76% in 1HFY21. 

Excluding the net modification impact, adjusted NII expanded 11.7% to RM1,550.9 million, with adjusted NIM of 1.96% compared to 1.80% for the same period last year. 

Non-interest income (NOII) was down 17.0% YoY, due to lower trading and investment income from group treasury and markets and insurance respectively. This was offset in part by higher fee income from investment banking as well as wealth and fund management. 

Gross impaired loans ratio was lower at 1.44% compared to 1.54% in FY21 with loan loss coverage ratio increasing to 159% from 135.6% last year. 

Customer deposits saw a slight 3.9% decrease year-to-date to RM115.9 billion, with time deposits reducing by 5.3% while CASA balances remained stable at RM35.6 billion. 

The group remains highly liquid with the liquidity coverage ratio of 180.9%. 

Pre-tax profit for its retail banking segment increased by RM102.3 million to RM388.7 million in 1HFY22 versus RM286.4 million posted in 1HFY21. 

Net income for the segment was up by RM94.7 million mainly from higher net finance income due to higher volume and margin impact, coupled with higher fee income from wealth. 

AmBank’s business banking segment saw a drop in its pre-tax profit by RM7.2 million to RM89.5 million in 1HFY22 against RM96.7 million in 1HFY21 dragged down by higher net impairment, partly offset by higher net income and lower other operating expenses (opex). 

Business banking deposits rose RM700 million to RM8.6 billion from both current accounts and fixed deposits, while gross loans, advances and financing grew by RM1.1 billion (9.3%) to close at RM13 billion. 

Profit before tax for corporate banking decreased by RM7.5 million mainly due to higher net impairment, partly offset by higher net income and lower opex.