KUALA LUMPUR (Nov 22): AMMB Holdings Bhd's net profit rose 10.06% to RM469.78 million in the second quarter ended Sept 30 (2QFY2024) from RM426.84 million, as write-back of provisions and lower loan impairments more than offset the weaker operating profit in the quarter.

Earnings per share rose 14.20 sen from 12.89 sen.

The 2QFY2024 performance is AMMB’s highest quarterly net profit attributable to equity holders since 4QFY2015, when it posted net profit of RM519.22 million against net income of RM1.11 billion.

The latest quarter saw operating profit (before impairment of losses) fall 8.1% to RM631.05 million from RM686.9 million, on higher operating expenses and as net income slipped 3.51% to RM1.12 billion, from RM1.16 billion.

The net income decline was due to a 6.55% decrease in net interest income to RM560.66 million, while Islamic banking net income also fell 16.71% to RM302.77 million.

The banking group has declared a dividend of six sen per share, unchanged from the same period last year.

“We delivered a resilient set of results in 1HFY2024, with an improved performance in 2QFY2024,” said outgoing AmBank group chief executive officer Datuk Sulaiman Mohd Tahir, who will retire on Thursday (Nov 23).

“We continue to strengthen our capital ratios, we regained our AA2 credit rating and declared an interim dividend of six sen per share.

“We are optimistic that growth of the Malaysian economy will continue to be solid in the second half of FY2024, driven by domestic demand despite the current volatile global financial markets and continued geopolitical tensions,” he said.

For the first half of FY2024 (1HFY2024), AMMB’s net profit was 1.3% higher at RM848.15 million or 25.65 sen per share, from RM839.23 million or 25.29 sen per share.

Its operating profit for the period was 1.66% higher at RM1.27 billion against RM1.25 billion, as net income grew 3.4% to RM2.27 billion thanks to higher non-interest income which offset the 7.3% decline in net interest income to RM1.08 billion.

It also saw continuing operations in the insurance segment turned to profit this year, on higher investment income and net earned premium, offset by higher reserves and claims.

In a statement, AMMB said net interest margin (NIM) compressed to 1.79% from 2.17% in 1HFY2023, while non-interest income grew 23.7% year-on-year (y-o-y) from higher fees, trading gains and investment income.

Cost-to-income ratio in the period improved to 43%, from 45%, although the same ratio for continuing operations saw an uptick to 44%, from 43%. AMMB disposed of AmGeneral Holdings Bhd to Liberty Insurance Bhd last year.

It saw higher net impairment charges incurred in retail and business banking, which increased by RM49.8 million after excluding AmGeneral’s impairment last year.

On other key ratios, AMMB’s gross impaired loans (GIL) ratio rose to 1.65%, from 1.46% in FY2023. Annualised return on equity (ROE) meanwhile slipped to 9.3%, from 9.9% in 1HFY2023.

Net assets per share rose to RM5.60 with return on assets of 0.89%, from 0.88% in 1HFY2023.

Customer deposits improved 3.8% year-to-date (YTD) and 11.8% y-o-y to RM135.3 billion. Time deposits grew 12.6% YTD to RM91.8 billion.

Current account and savings account (CASA) balances fell by 10.8% to RM43.5 billion, with CASA mix at 32.2%, against 37.4% in FY2023.

AMMB's share price was up one sen or 0.25% to RM3.94 at noon market break, giving the group a market capitalisation of RM13.06 billion.