KUALA LUMPUR: AMMB HOLDINGS BHD []'s earnings rose 38.6% to RM332.87 million in the second quarter ended Sept 30 (2QFY11), from RM240.15 million a year ago, boosted by an increase in interest income.

It said on Friday, Nov 12, revenue rose 11.9% to RM1.77 billion from RM1.584 billion. Earnings per share were 11.09 sen compared with 8.29 sen. It declared an interim dividend of six sen per share.

Group CEO and managing director said: "Over the past three years, the group has consistently delivered good earnings growth via focus on profitability, diversification and sustainability. We will continue to execute to our strategic themes, strengthen market positions, and leverage growth opportunities."

Its 2QFY11 pre-tax profit increased by 42% to RM981.4 million from RM691.1 million, underpinned by higher interest income and operating income.

The improvement was due to an increase in interest income by RM108.8 million and increase in other operating income by RM49.9 million.

Gross loans and advances expanded to RM69.0 billion to register an annual growth of 8.3%.

The growth was mainly attributed to financing of finance, insurance, real estate and business activities, education and health, residential PROPERTIES [], manufacturing and CONSTRUCTION [].

Financing for purchase of transport vehicles accounted for 34.3% of total loans, followed by loans for residential properties which accounted for 16.7% of total loans.

For the first half, earnings rose 40.6% to RM701.15 million from RM498.39 million. Revenur was 10.2% higher at RM3.477 billion compared with RM3.155 in the previous corresponding period.

"With strong H1FY11 results, we have proposed an interim single tier ordinary dividend of 6.0% for the financial year ending March 31, 2011," Cheah said.

The group's profit growth was underpinned by higher income across most divisions, as well as lower individual and collective impairments. Islamic banking contributed 18.6% to the group's PAT.

On the performance by various divisions, AMMB said for retail banking net profit increased 17.7% to RM 309.5 million.

"The division focused on profitable segments and pricing for risk as the market continued to experience uneconomic pricing in selected products such as mortgage," it said.

As for business banking, net profit grew 58.0% to RM 117.7 million from lending to SME (small medium enterprises) growth sectors, trade and transactional businesses.

Its corporate and institutional banking segment reported good income growth, lower impairments. Net profit was up 49.9% to RM 101.6 million on the back of a diversified loans portfolio and higher income from lending and international businesses.

However, its investment banking reported subdued debt market. Profit after tax was down 23.1% at RM 60.5 million amidst the subdued debt market and good benefits from disposal of a large underwritten bond in H1FY10, but picked up in the second quarter with good pipeline.