AmBank Group Net Profit Falls To RM378.37 Million In 1Q FY2024

AmBank Group net profit falls to RM378.37 million in 1Q FY2024
AmBank Group net profit falls to RM378.37 million in 1Q FY2024

AmBank Group reported that particular provisions for a small number of accounts and a forward-looking charge of RM49.7 million caused a rise in net impairment charges in commercial banking.

KUALA LUMPUR — AMMB Holdings Bhd’s (AmBank Group) net profit fell to RM378.37 million in the first quarter ended June 30, 2023 (1Q FY2024) from RM410.39 million a year before amid a sharp rise in net impairment charges mainly due to higher provisions. 

AmBank Groups’s revenue, however, was higher at RM1.2 billion from RM1.15 billion. 

Net impairment charges stood at RM190.4 million during the quarter compared to RM63.9 million in 1Q FY2023, which included a forward-looking charge of RM101.7 million, offset by overlay reversals of RM99.6 million.

AmBank Group said an increase in net impairment charges was recorded in business banking driven by a forward-looking charge of RM49.7 million and specific provisions for select accounts.

In retail banking, higher Stage 3 impairment charges due to a post-moratorium spike in delinquency rates and a forward-looking charge of RM21.7 million were partially offset by an RM30 million reversal of overlays, while in wholesale banking, a net writeback of RM49.1 million was recorded, with a forward-looking charge of RM30.3 million more than offset by a reversal of overlays of RM69.6 million.

Chief executive officer Datuk Sulaiman Mohd Tahir said AmBank Group managed to navigate net interest margin compressions and solidified its liquidity with capital ratios improving further in 1Q.

Continuing operations reported 11.2 per cent year-on-year (y-o-y) growth in total income, driven by a 67.8 per cent increase in non-interest income (NoII), marginally offset by a 2.7 per cent reduction in net interest income (NII).

“The strong growth in NoII from continuing operations was driven by trading gains in securities, higher fees earned from business banking, investment banking and asset management, as well as improved income from life and general insurance.

“A further RM51.1 million gain from the completion of our general insurance business disposal was recorded. NII decreased by 6.3 per cent due to net interest margin (NIM) compression,” he said in a statement today.

The bank’s loan loss coverage ratio (LLC) stood at 115.6 per cent during the said quarter, while the gross impaired loan (GIL) ratio was 1.66 per cent.


“We continue to monitor our asset quality vigilantly by taking pre-emptive steps to manage accounts showing signs of delinquency and initiating restructuring and rescheduling exercises if appropriate,” he added.

AmBank Group also remained highly liquid, with the liquidity coverage ratio (LCR) improving to 170 per cent.

In total, gross loans and financing decreased by a marginal one per cent to RM129.0 billion in 1Q FY2024 due to lower customer activities, which led to a reduction in the loans portfolio of wholesale banking at -4.2 per cent year-to-date (YTD) and business banking of -3.7 per cent YTD.

However, retail banking registered consistent loan growth of 1.3 per cent YTD.

Total customer deposits stayed at RM130.3 billion, with time deposits increasing 11.2 per cent to RM90.7 billion offset by a decrease in current account savings account (CASA) balances of 18.9 per cent to RM39.6 billion.

“We attributed this to depositors favouring time deposits over CASA in search of better yields in the current rising interest rate environment, leading to a CASA mix of 30.4 per cent,” Sulaiman said.

Sulaiman said despite the headwinds of tempered exports and muted external appetites, the bank is bullish on domestic demand, a pillar that has consistently been the backbone of the local economy.

“As we embark on the final lap of our Focus 8 strategy, our ambition remains undeterred.

“AmBank Group is focused on its commitment to value creation for shareholders and stakeholders alike,” he said, adding that it is keenly eyeing opportunities in the small and medium enterprises sector while upholding environmental, social, and governance mandates and championing a digital future for the group. — Bernama

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