KUALA LUMPUR (May 31): AMMB Holdings Bhd’s (AmBank's) earnings for the fourth quarter ended March 31, 2022 (4QFY22) returned to the black with a net profit of RM391.75 million compared with a net loss of RM4.69 billion in the same period a year ago when it was dragged mainly by one-off exceptional items totalling RM4.77 billion that included the RM2.83 billion 1Malaysia Development Bhd (1MDB) settlement.

As such, the bank posted an earnings per share of 11.83 sen versus a loss per share of 156 sen previously, its bourse filing showed on Tuesday.

Quarterly revenue dipped slightly to RM1.12 billion from RM1.13 billion in the same period last year.

For the full year, AmBank posted a net profit of RM1.5 billion compared with a net loss of RM3.83 billion a year prior, while revenue was up 2.47% to RM4.66 billion from RM4.55 billion.

In a separate statement, AmBank noted non-interest income reduced by 14.1% year-on-year (y-o-y), owing to the volatile market conditions which led to lower trading and investment income from the group’s treasury and markets as well as investment income from the insurance business.

This, the bank said, was partly offset by higher fee income from corporate banking and investment banking.

In addition, the group’s net impairment charge of RM766 million was lower by 32.6%, as compared to RM1.14 billion in the previous year mainly attributable to reversals of both forward looking and central overlay provisions, which offset against the provision charges for oil and gas exposures.

Meanwhile, AmBank said the group continues to monitor its asset quality vigilantly and remains proactive in its risk management notwithstanding there had been a significant drop in loans under relief schemes.

AmBank’s gross loans and financing came in at RM120 billion, which grew 6.5%, or RM7.3 billion as compared to the previous year, driven by broad-based loans growth, in line with the sustained rebound of improved global and domestic economic activities, it noted.

The bank’s retail banking loans grew RM3.6 billion, primarily contributed by mortgage loans as well as personal financing, offset by a reduction in auto finance.

In addition, its wholesale banking and business banking loans charted loan growth of RM2.2 billion (+7.7%) and RM1.5 billion (+8.4%) respectively.

Separately, deposits from AmBank’s customers increased by 1.7% y-o-y to RM122.6 billion, mainly driven by a robust 20.6% growth in current account saving account (CASA) balances to RM43.1 billion, which cushioned the 6.3% y-o-y decrease in time deposits.

“Sustaining our strong performance, we ended the year with a high total income of RM4.66 billion. Net interest income (NII) increased 11.6% y-o-y on the back of 6.5% loan growth while net interest margin (NIM) was higher at 2.05% (FY21: 1.90%),” said AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir.

Sulaiman added AmBank is pleased to propose a final dividend of five sen per share for the current financial year ended March 31, 2022, which is a testament to the group’s commitment to sustainable growth.

“We continue to be committed to our resilient capital building via profit accretion and our ongoing divestiture of non-core assets,” he said.

On prospects, AmBank noted in its filing to Bursa Malaysia that it expects Bank Negara Malaysia to revise the policy rate by another one or two 25 basis points (bps) hikes in second half 2022 if the future incoming data allows for it, with any risk of statutory reserve requirement hike by 50bps to 100bps in 2022 depending on how the liquidity influences the banking environment.

AmBank viewed that although the country’s headline inflation remains manageable, mainly driven by the cost side, a rate hike by BNM would help mitigate the potential interest rates differential.

This, the bank said, would provide support to the ringgit against the US dollar and in turn provide some cushioning to inflation namely coming from the import segments.

At the time of writing, AmBank’s share price was nine sen or 2.62% higher at RM3.52, bringing a market capitalisation of RM11.6 billion.