KUALA LUMPUR, Aug 22 -- AMMB Holdings Bhd (AmBank Group) posted a 12.6 per cent rise in net profit to RM391.46 million in the first quarter ended June 30, 2019 (Q1) from RM347.59 million in the same period a year ago.
Revenue was 10.1 per cent higher at RM2.39 billion compared with RM2.17 billion previously.
Group chief executive officer Datuk Sulaiman Mohd Tahir said the bank’s total income rose five per cent to RM1.06 billion, underpinned by consistent net interest income (NII) growth of 4.2 per cent and higher trading and insurance income.
"Return on equity was 8.8 per cent higher in the quarter reviewed compared with 8.3 per cent in Q1 in the 2019 financial year (FY19).
"At the same time, we continued to exert cost discipline with our cost-to-income (CTI) further improving to 49.7 per cent (Q1 FY19: 50.6 per cent). This is a testament to our transformation strategy, which has placed the group on a stronger footing to weather the more challenging operating landscape," he said in a statement.
Sulaiman said the group is now in the third year of its Business Efficiency Target 300 (BET300) programme and continued to record cost savings, which has allowed it to re-invest some of these savings back into its strategic business streams, digital capabilities and infrastructure.
In addition, operating expenses were well contained, up 3.1 per cent year-on-year (y-o-y) to RM528.6 million.
He said gross loans increased 2.5 per cent y-o-y, but declined one per cent year-to-date to RM100.8 billion, mainly due to corporate loan repayments and decline in auto loans.
Mortgage loans increased 1.7 per cent year-to-date to RM34.7 billion, while loans in the retail small and medium-sized enterprises and business banking segments grew 6.0 per cent and 1.1 per cent year-to-date, respectively.
Total customer deposits increased 4.32 per cent y-o-y to RM102.8 billion, but was down 3.9 per cent year-to-date.
Sulaiman said AmBank Group remained focused on further strengthening cost efficiencies through its BET300 programme, which involves every line of business.
'’“The group’s financial year 2020 strategic priorities are in place. As part of our digital road map, we will be rolling out more digital initiatives that provide us with a competitive edge and at the same time benefit customers," he added.
He said Malaysia's outlook remained stable, with the economy expanding 4.9 per cent y-o-y during the second quarter of 2019, supported by sustained domestic demand.
The country’s gross domestic product is projected to grow at about 4.5 cent in 2019, underpinned by domestic demand, with private consumption taking the lead, while inflation is anticipated to be around one per cent.
"While the overnight policy rate is expected to remain unchanged at 3.0 per cent for the rest of the year, there is still room for Bank Negara Malaysia to reduce the rate by 25 basis points in the second half of 2019, in a move to support domestic demand and in tandem with global monetary policy, where rates are expected to drop further.
"In tandem with a moderate economic outlook, the banking system loans growth is envisaged to grow at around 4.6 per cent," he added.