- AMMB Holdings Bhd’s (AMMB)’s FY13 net earnings of RM1,635mil is in line with FY13F consensus’ RM1,661mil. FY13’s ROE is 14%, in line with earlier target.

- The company declared a final single tier dividend of RM0.15 for FY13. Total dividend for FY13 is RM0.22. Dividend payout ratio is 41% for FY13, in line with target of 40% to 50%.

- Gross loans growth came in at 8.9% in FY13, in line with company’s target of 8% to 10%. The company continues to focus on growth initiatives in profitable segments.

- Net interest margin improved 10bps QoQ to 2.70% in 4QFY13 vs. 2.60% in 3QFY13, with full three months incorporation of MBF Cards in 4Q compared to only 1 month in 3Q.

- On a YoY basis, NIM decline was only 7bps YoY to 2.68% FY13 from 2.75% FY12. This was better than earlier guided target of 10bps to 15bps YoY decline for FY13F.

- CASA growth remained strong at 9.5% QoQ in 4QFY13, higher than 3QFY13’s 7.1% QoQ. This has further increased CASA contribution to 20% in 4QFY13, from 19% 3QFY13 and 17% a year ago in 4QFY12. The higher CASA contributed to the better NIM.

- Gross impaired loans improved further with a 0.9% QoQ reduction in absolute terms. Thus, gross impaired loans ratio was sustained at only 1.98% in 4QFY13, vs. 2.04% in 3QFY13.

- Loan loss cover strengthened to 129.3% in 4QFY13 from 123.5% in 3QFY13.

- Credit costs came in at an estimated 36bps in 4QFY13, which is relatively unchanged from 34bps in 3QFY13. FY13’s credit costs is only 21bps (FY12: 50bps), due mainly to good recoveries.

- The company provided new FY14 KPI:- (a) Net earnings growth of 10% to 12%; (b) ROE target of 14.0% to 14.5%; (c) CTI target of less than 46%; (d) gross impaired loans ratio of less than 2.0%; (e) loans growth target of 10%; (f) NIM expected to contract by 10bps or less; (g) Fee income ratio of 35%; (h) CASA contribution of more than 20%; (i) credit cost of 30bps or less.ca

Source: AmeSecurities