KUALA LUMPUR: AMMB Holdings Bhd’s net profit for the third quarter (3Q) ended Dec 31, 2009 rose 8.3% to RM268.5 million from RM247.9 million a year earlier underpinned by improvement in retail banking and Islamic banking business.

Revenue rose 11.4% to RM1.73 billion from RM1.55 billion, while earnings per share fell to 8.92 sen from 9.11 sen due to the higher number of shares in issue. No dividend was declared.

For the nine months, AMMB’s net profit rose 12.6% to RM766.9 million from RM681 million, while revenue increased 10.9% to RM4.9 billion from RM4.42 billion.

In a statement yesterday, AMMB said its net interest income rose 14% or RM62.1 million to RM503.9 million a year earlier, while for the Islamic banking business, it rose 24.1% or RM34.7 million to RM178.5 million.

Other operating income rose 15.3% to RM214.9 million from RM186.4 million, while net income from insurance business improved by RM7.85 million to RM39 million from RM31.15 million.

AMMB said there was a transfer from profit equalisation reserve of RM6.5 million in 3QFY09 compared with RM8.3 million a year earlier, which in turn, contributed RM14.8 million to the improvement in earnings.

However, this was offset by higher other operating expenses of RM396.4 million and impairment loss on securities of RM19.2 million.

AMMB’s allowances on loans losses fell marginally to RM141.5 million from RM142.65 million. The banking group also made impairment losses of RM19.2 million from RM12.5 million a year earlier.

AMMB’s gross loans and advances expanded to RM66 billion to register an annual growth of 16.3% mainly due to financing of landed properties, working capital and passenger vehicles.

AMMB said it saw further improvement in asset quality with net non-performing loans ratio on three-month classification falling to 1.8% as at Dec 31, 2009 from 2.6% as at March 31, 2009. AMMB’s core capital ratio stood at 9.82%, while risk-weighted capital ratio was 15.32%.

Meanwhile, in the statement, AMMB managing director and group CEO Cheah Tek Kuang said:  “In spite of disciplined execution and improving business outlook, more stringent BIS-Basel III capital requirements will inevitably delay the timeframe for full achievement of our Medium Term Aspirations (MTA).”

He said the group was now well placed to deliver a record full-year net profit.

“AMMB remains cautiously optimistic on the rate of recovery and the possible lag effects on the banking sector,” he said.

“As we look at 2010, we are encouraged by the increasing global optimism for revival of world economies. However, by virtue of its trade and export dependency, we expect the recovery process in Malaysia to be gradual,” he added.


This article appeared in The Edge Financial Daily, February 9, 2010.