- AMMB Holdings Bhd (AMMB)'s 2QFY13 annualised net earnings are in-line with FY13F consensus' RM1,650mil. AMMB has proposed a single-tier dividend of 7.0 sen/share (last year: 6.6 sen/share). Earnings declined 12% QoQ due to mainly to lack of impaired asset recoveries, which were particularly strong in 1QFY13 at circa RM30mil to RM40mil.

- Loans expanded 2.7% QoQ, leading to an annualised rate of 12.3%. This is above the earlier loans growth target of 8% to 9%. Key focus areas were still the more profitable real estate and business activities, with annualised growth of 27.6% and 45.1%, respectively. With stronger loans YTD, AMMB has now upgraded its loans growth target to 8% to 10%. 

- In terms of retail loans, residential mortgage growth was higher at 1.3% QoQ in 2QFY13, compared with a -1.7% QoQ decline in 1QFY13. AMMB indicated that it now intends to grow retail loans at a faster rate, primarily to keep pace with industry growth. Overall, NIM was 12bps lower QoQ; the pace of decline may slow given that there are indications of stabilisation in competition. 

- Deposits growth remained higher than loans growth at 3.0% QoQ. CASA growth was relatively flat at 0.4% QoQ in 2QFY13 but this is likely to be viewed against a particularly high growth of 9.7% QoQ in the previous quarter. Thus, CASA contribution was well-sustained at 17.3% in this quarter, even if compared with 17.8% in the previous quarter. Note that the previous quarter's CASA had increased substantially from the preceding 4QFY12's 16.9%. CASA contribution was thus sustained at the higher end of the 16% to 18% target range. 

- Gross impaired loans improved further with a 4% reduction on a QoQ basis in absolute terms. Thus, gross impaired loans ratio is now close to the 2% level, at 2.2% in 2QFY13, compared with 2.4% in 1QFY13. Loan loss cover has now surpassed the 120% mark, to 121.8% in 2QFY13 from 1QFY13's 116.3%. 

- Credit cost remained low at only 7bps in this quarter (1QFY13: 8bps), which is much lower than earlier guidance of 25bps. The company mentioned at the briefing that there have been no particular trends or signals of concerns in terms of asset quality trend so far. 

- The company said in terms of the macro economy, the areas which may have seen some softening are the exports and manufacturing sectors, but AMMB's exposure to these remains minimal.