Latest news with #AmBank
New Straits Times
2 days ago
- Business
- New Straits Times
Banking sector poised for stronger earnings: HLIB Research
KUALA LUMPUR: The banking sector's earnings momentum is projected to accelerate in the second half of 2025 (2H), following a modest performance in the first quarter. Hong Leong Investment Bank Bhd (HLIB Research) said the first quarter of 2025 earnings season was broadly in line with expectations, with Bank Islam Malaysia Bhd being the only bank under its coverage to miss estimates due to higher credit costs. The remaining seven banks it covers, namely Affin Bank Bhd, Alliance Bank Malaysia Bhd, AMMB Holdings Bhd (AmBank), CIMB Group Holdings Bhd, Malayan Banking Bhd (Maybank), Public Bank Bhd and RHB Bank Bhd, delivered results that tracked closely with forecasts. The firm said the sector earnings rose 4.1 per cent year-on-year (YoY), driven by lower loan impairment provisions, but fell 3.4 per cent quarter-on-quarter on a sequential rise in credit charges. "Looking ahead, we forecast sector earnings for financial years 2024 to 2026 (FY24-25) to grow at a two-year compound annual growth rate of 3.4 per cent," it said in a note. HLIB Research anticipates net interest margins of the bank in the second quarter of this year to hold up reasonably well sequentially. It pointed out three key forces at play, including fresh liquidity from the recent statutory reserve requirement cut, easing deposit competition and a sector-wide pivot to more disciplined loan expansion and funding strategies. "This proactive stance is already visible, with banks cutting promotional/campaign fixed deposit rates by five to 15 basis points in May, ahead of a potential Overnight Policy Rate cut, though the full margin benefit may only materialise in 2H 2025. "Beyond margins, the bedrock of asset quality is expected to remain solid, supported by resilient domestic economic conditions and minimal US trade exposure," the firm added. Recognising risks from the secondary impacts of trade uncertainty, HLIB Research said any potential weakness will be well-contained. It noted that the sector is significantly more resilient than in previous downturns, primarily due to the formidable provision buffers accumulated over the past five years. It said the "fortress of provisions" provides a robust defence, capable of absorbing any stress and cushioning the gross impaired loan ratio, which currently stands near historical lows. HLIB Research maintained its "Overweight" stance on the banking sector and views the KLFIN Index's year-to-date 7.0 per cent decline as a tactical opportunity to accumulate ahead of a potential recovery in the latter part of the year. The firm's top picks include CIMB with a target price of RM8.80 a share, as well as AmBank (TP: RM6.20) and RHB (TP: RM7.70).
Business Times
7 days ago
- Business
- Business Times
Maybank cuts view on Malaysian banking sector to ‘neutral' as tariffs, slower GDP weigh on earnings
[SINGAPORE] Maybank Investment Bank has downgraded its rating for the Malaysian banking sector to 'neutral', from 'positive' previously, due to slower gross domestic product growth (GDP), subdued earnings prospects, and macroeconomic uncertainty. Despite the downgrade, the bank's analyst, Desmond Ch'ng, said in a note on Tuesday (Jun 3) that Maybank still recommended 'buy' calls for Public Bank, AMMB (AmBank), Hong Leong Bank, and Hong Leong Financial Group – in this order of preference –citing strong management, prudent credit buffers, and resilient fundamentals. Disappointing performance Overall, Ch'ng noted that the results for the first quarter of FY2025 were 'lacklustre' and that no bank surprised positively as the results of several – such as Hong Leong Bank, Hong Leong Financial Group, RHB Bank, Public Bank and Bank Islam Malaysia (BIMB) – came in below expectations. For instance, on a quarter-on-quarter basis, Hong Leong Bank's core net profit dipped 8 per cent to RM1.1 billion (S$333.6 million), while RHB Bank saw a 10 per cent decline to RM750 million. Public Bank's core net profit fell 3 per cent to RM1.75 billion. On BIMB, Ch'ng highlighted that the bank was falling short of its full-year return on equity target of 8 per cent, having achieved only 7.6 per cent. That said, Ch'ng noted that Alliance Bank Malaysia, AmBank, CIMB Group Holdings (CIMB), and Maybank had results that were within consensus' expectations. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Alliance Bank's core net profit rose 6 per cent quarter-on-quarter to RM197 million for the first quarter of FY2025; AmBank's increased 6 per cent to RM514 million; CIMB posted a 10 per cent improvement to RM2 billion; and Maybank recorded a 2 per cent uptick to RM2.6 billion. Still, sector-wide indicators point to a muted quarter. For example, cumulative loan growth slowed to 4.4 per cent year-on-year as at end-March 2025, down from 5.5 per cent previously. Meanwhile, net interest margins also narrowed further to 2.07 per cent, continuing a downward trend, while fee income rose just 1 per cent year-on-year, a sharp pullback from last year's double-digit growth. Lowered GDP forecasts In terms of GDP growth, Ch'ng said that Maybank's economics team has lowered its forecast across the region due to the widespread tariffs imposed by US President Donald Trump and heightened global economic uncertainty. For Malaysia, Maybank has lowered its GDP growth forecast to 4.1 per cent in 2025 and 4.2 per cent in 2026, down from earlier projections of 4.9 per cent and 4.6 per cent respectively. In comparison, Singapore's growth is now expected to come in at 2.4 per cent in 2025 – from 2.6 per cent – and 1.8 per cent in 2026. Indonesia's 2025 growth forecast has been cut to 1.7 per cent, from 2.55 per cent previously, while the 2026 forecast remains unchanged at 4.7 per cent. Ch'ng added that Maybank expects the US Federal Reserve to cut the Fed Funds Rate by 75 basis points in 2025, followed by a further 50 basis points in 2026. In Malaysia, a 25-basis-point rate cut is anticipated in the second half of 2025. Meanwhile, the 3-month Singapore Overnight Rate Average is expected to moderate from 2.28 per cent currently to 1.7 per cent in 2025, and further to 1.4 per cent in 2026. In Indonesia, the benchmark rate, currently at 5.50 per cent, is projected to fall by 25 basis points in the first half of 2025, and by another 50 basis points in 2026, bringing it to 4.75 per cent. Taking these into account, Maybank has lowered its earnings estimates for Malaysia's banks by 5 per cent in 2025 and 4 per cent in 2026. 'Buy' picks On its 'buy' calls, Ch'ng said Public Bank is seen as well-managed with sufficient credit buffers and rising non-interest income. AmBank, he said, is focused on funding cost control and business banking, with potential for higher dividends. As for Hong Leong Bank, it stands out for its strong asset quality and liquidity, while Hong Leong Financial Group provides cheaper exposure to Hong Leong Bank, albeit with lower liquidity.
The Star
27-05-2025
- Business
- The Star
AmBank may replace Hong Leong Financial Group in upcoming KLCI index review
KUALA LUMPUR: CIMB Securities Sdn Bhd anticipates that AMMB Holdings Bhd (AmBank) may replace Hong Leong Financial Group Bhd (HLFG) in the FTSE Bursa Malaysia KLCI (FBM KLCI) Index, following an upcoming KLCI semi-annual review. In a note, CIMB Securities said the review is based on share prices at the close of trading on May 26, 2025. FTSE and Bursa Malaysia will announce the preliminary results of the KLCI review on June 4 2025, a day ahead of the official release of the final review on June 5. Any changes to the index constituents will take effect on June 23, 2025, the note said. CIMB Securities said HLFG is likely to fail the liquidity screening requirement, which mandates a monthly median trading velocity of at least 0.04 per cent in eight out of the past 12 months. HLFG is one month short of the required eight months. "To remain in the KLCI during the semi-annual review, existing constituents must satisfy all three criteria. "First, in the market capitalisation ranking. Secondly, a minimum free float of 15 per cent and third, the liquidity screening,' the note said. The liquidity screen assesses the median daily trading volume as a percentage of shares in issue over a 12-month review period. A stock must maintain a monthly median daily trading volume of at least 0.04 per cent of its shares in issue, after applying any investability weightings, in at least eight out of the past 12 months. HLFG's weighting in the KLCI stood at 0.7 per cent as at Dec 31, 2024. CIMB Security said if an existing FBM KLCI constituent is removed from the index, it will be replaced by the highest-ranking non-constituent company based on market capitalisation. "As of May 26, AmBank holds this position. Our checks also confirm that AmBank meets the other two inclusion criteria: it has a minimum free float of at least 15 per cent and has satisfied the liquidity requirement, with a monthly median trading velocity of at least 0.05 per cent in the past 12 months (Jun 2024-May 2025),' it added. - Bernama
The Star
27-05-2025
- Business
- The Star
AmBank posts higher RM2bil net profit for FY25
PETALING JAYA: AMMB Holdings Bhd (AmBank) has closed its first financial year since the rollout of its Winning Together (WT29) strategy, marked by growth in both interest and fee income. The financial group posted a net profit of RM513.93mil for the final quarter ended March 31, 2025 (4Q25), up from RM476.54mil in the year-ago quarter. Revenue rose to RM1.28bil from RM1.17bil in 4Q24, while earnings per share climbed to 15.55 sen from 14.41 sen previously. The final-quarter result brought the full-year net profit to RM2bil and revenue to RM4.93bil, compared with RM1.87bil and RM4.65bil in financial year 2024 (FY24). The group declared a final dividend of 19.9 sen per share for shareholders on the Record of Depositors as of June 19, 2025, payable on July 8, 2025. This brought AmBank's total dividend payout for FY25 to 30.2 sen per share, up from 22.6 sen in FY24. Commenting on the group's improved performance, AmBank CEO Jamie Ling said its capital position remained solid, with total cash dividend rising to RM1bil. 'This reflects our confidence as we continue to build our businesses from a position of strength,' he said in a statement. In the year under review, AmBank reported a net interest income (NII) of RM3.57bil, marking an 8% year-on-year (y-o-y) increase. This was mainly owing to a 15-basis-point (bps) expansion in net interest margin to 1.94% as well as loans and financing growth of 3.5% y-o-y. Non-interest income grew 1.3% y-o-y to RM1.36bil due to higher fee income, which was partially offset by lower trading gains from group treasury and markets. The group's overall expenses in FY25 rose 7.1% y-o-y to RM2.2bil due to higher personnel and computerisation costs. The cost-to-income ratio stood at 44.6%, up from RM44.2% in FY24. On the balance sheet, total loans, advances and financing grew 3.5% y-o-y to RM138.9bil, while total customer deposits fell 0.6% y-o-y to RM141.5bil. Time deposits grew 1% y-o-y to RM90.5bil, while current account savings account (Casa) balances decreased 3.3% y-o-y to RM51bil, resulting in a lower Casa mix of 36%.
The Star
26-05-2025
- Business
- The Star
AmBank records RM2bil net profit in FY25, declares final div of 19.9c/share
KUALA LUMPUR: AMMB Holdings Bhd (AmBank) has closed its first financial year since the rollout of its Winning Together (WT29) strategy - marked by growth in both interest and fee income. The financial group posted a net profit of RM513.93mil in the final quarter ended March 31, 2025, up from RM476.54mil in the year-ago quarter. Revenue during the quarter under review rose to RM1.28bil from RM1.17bil in 4QFY24, while earnings per share climbed to 15.55 sen from 14.41 sen previously. The final-quarter result brought the full-year net profit to RM2bil and revenue to RM4.93bil, as compared to RM1.87bil and RM4.65bil in FY24. The group declared a final dividend of 19.9 sen per share for depositors on the record of depositors on June 19, 2025, payable on July 8, 2025. This brought AmBank's total dividend payout for FY25 to 30.2 sen per share, as compared to 22.6 sen in FY24. Commenting on the group's improved performance, AmBank CEO Jamie Long said its capital position remained solid while total cash dividend increased to RM1bil. "This reflects our confidence as we continue to build our businesses from a position of strength," he said in a statement. In the year under review, AmBank reported a net interest income (NII) of RM3.57bil, an 8% increase year-on-year (y-o-y), mainly owing to a 15bps net interest margin expansion to 1.94% as well as loans and financing growth of 3.5% y-o-y. Non-interest income grew 1.3% y-o-y to RM1.36bil due to higher fee income, partially offset by lower trading gains from group treasury and market. The group's overall expenses in FY25 grew 7.1% y-o-y to RM2.2bil due to higher personnel and computerisation costs. The cost-to-income ratio stood at 44.6%, up from RM44.2% in FY24. On balance sheet, the group's total loans, advances and financing grew 3.5% y-o-y to RM138.9bil while total customer deposits fell 0.6% y-o-y to RM141.5bil. Time deposits grew 1% y-o-y to RM90.5bil while current account savings account (Casa) decreased 3.3% y-o-y to RM51bil for a lower Casa mix of 36%.
