KUALA LUMPUR (Aug 20): AMMB Holdings Bhd (KL:AMBANK), the country’s sixth largest banking group by assets, on Tuesday reported a 32.2% gain in its first-quarter net profit, thanks to sharply lower impairments and higher interest income.

Net profit for the three months ended June 30, 2024 (1QFY2025) was RM500.2 million, compared with RM378.37 million a year ago, AMMB said in an exchange filing. Net impairment charges declined to RM12.3 million from RM190.4 million, partly helped by higher forward-looking reversals.

Net interest income rose 6.4% to RM860.9 million from RM808.7 million. Non-interest income fell 19.2% to RM317.6 million from RM393.2 million, due to lower trading and securities gain, while 1QFY2024 was also boosted by a one-off gain of RM51.1 million from the sale of a general insurance unit.

No dividend was declared for the quarter under review.

Looking ahead, AMMB plans to prioritise the growth of its small- and medium-sized enterprises and mid-corporate segments to drive lending expansion. In addition, the bank aims to enhance its wealth management services and develop efficient supply chain solutions to better serve customers.

AMMB also commits to maintaining healthy liquidity levels and the continuous strengthening of its capital base, while closely monitoring asset quality to mitigate balance sheet related risks.

“We have made a great start to the new financial year as we execute our Winning Together (WT29) Strategy, and we remain optimistic about our FY2025 prospects,” AMMB chief executive officer Jamie Ling said in a statement.

The net interest margin, a measure of profitability from interest charged on loans after paying returns on deposits, expanded 13 basis points to 1.89%. In 1QFY2025, gross loans, advances and financing grew 2.9% from a year earlier, mainly led by growth in business banking loans.

Overall expenses rose 2.5% from a year ago, pushing the cost-to-income ratio up to 44.2%.

The annualised return-on-equity improved to 10.2% from 8.3% a year earlier, while the return on assets rose to 1.02% from 0.83%.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — were 1.70%, while loan loss coverage, including regulatory reserves, was at 107.6%.

The common equity tier 1 capital ratio — a measure of a bank’s capital strength based on the highest quality of regulatory capital — improved to 13.24%, thanks to risk-weighted asset reduction from repayments, and improved reserves from the fair value through other comprehensive income portfolios.

Shares in AMMB had gained nine sen or 1.84% to RM4.98 at Tuesday’s noon break, giving it a market capitalisation of RM16.5 billion ahead of the results announcement.