Business

Saturday November 7, 2009

AMMB set to exceed FY10 profit forecast


PETALING JAYA: AMMB Holdings Bhd is poised to exceed its own profit forecast for the financial year ending March 31, 2010 (FY10), buoyed by a strong performance in the first six months, the country’s fifth biggest banking group said.

“The first half performance has set the foundation for the bank to deliver a full-year profit after tax and minority interest of between RM920mil and RM950mil. This revision improves on our original FY10 market guidence,” group chief executive officer and managing director Cheah Tek Kuang said in a statement yesterday.

The bank had earlier predicted that its full-year profit would be in the region of between RM800mil and RM900mil.

For the second quarter ended Sept 30, AMMB made a net profit RM240.16mil, up 4% against RM230.13mil in the previous corresponding period. Revenue climbed to RM1.59bil from RM1.46bil before.

This lifted its cumulative six-month net earnings to RM498.4mil, or 17.77 sen per share, compared with RM433mil, or 15.9 sen, posted a year ago.

The bank said based on its first-half performance, the group’s annualised earnings per share would be at 35.4 sen with post-tax return on equity at 12%.

“For FY10, AMMB’s priorities are to maintain profitable growth and dynamic focus (on volume versus price trade offs and asset quality) via executing our medium-term aspirations (MTAs),” Cheah said. “Executing to our MTAs around profitable growth, diversification and portfolio rebalancing, has provided the group with resilience and head-start advantage in the current financial year.”

Net non-performing loan ratio in the six-month period improved to 2.2% from 2.6% recorded in March 31, 2009.

Cheah said AMMB had adopted a more conservative provisioning in the first half to account for any major “systemic credit erosion.”

The bank said its main profit driver year to date were investment banking, corporate and institutional banking, as well as life assurance, with corporate and institutional banking recording the highest lending growth of 51.3% on the back of financing to government-backed projects and large mutinational corporations.

In the review for the second quarter, AMMB said net income from Islamic banking business declined to RM168.6mil from RM234.3mil in the preceeding quarter, while other operating income was reduced by RM16.2mil.

Allowance for losses on loans and financing rose by RM5.2mil. These, however, were cushioned by higher net interest income of RM33.4mil and net income of RM6.3mil from the insurance business.

Operating expenses and impairment loss of securities were lower at RM10.8mil and RM5.1mil.

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