Latest news with #AmBank
The Star
a day ago
- Business
- The Star
AmBank's corporate strategy off to good start
PETALING JAYA: AMMB Holdings Bhd (AmBank) will continue to focus on driving loan growth through the corporate and business banking segments as outlined under its Winning Together 29 (WT29) strategy. It also plans to reposition its retail franchise as a net funder, with an emphasis on operational excellence to enhance cost efficiency. These are among the highlights AmBank shared during its Strategy Day last Friday, which marked the completion of the first full year under the WT29 strategy. Hong Leong Investment Bank (HLIB) Research said successful execution of the strategy will reinforce the investment case of the stock, which was trading at relatively undemanding valuations and an attractive 5.8% dividend yield. The research house said there was also potential for a higher dividend pay out. 'WT29 appears off to a firm start. While the group delivered a solid returns on assets of 1.02%, its cost-to-income ratio (CIR) rose slightly to 44.6% against a target of below 40% due to investments and cost pressures. 'This constrained profit before provision growth to 5% year-on-year, below the 9% compound annual growth rate target,' HLIB Research said in a note to clients. According to the research house, the banking group's management maintains that its investments were laying the groundwork for future improvements in its CIR. Meanwhile, the bank's capital remains strong with Common Equity Tier-1 ratio supporting a move towards a 60% dividend payout ratio. While HLIB Research is bullish, MBSB Research maintained a 'neutral' rating on the stock, noting that the positives, including a potential increase in dividend payouts, improved loan and non-interest income growth and large recoveries have already been priced in. MBSB Research also expects headwinds in relation to asset quality issues and drag from its slower-growing retail segment. It also sees return on equity dipping below the current 10% level in future years as a consequence of its fast asset growth rate before its financial year 2029, ending March 31 (FY29) target of 11% is achieved. It said the stock is currently trading at forward FY26 price-to-book value (PBV) of 0.79 times, which is close to the firm's PBV valuation of 0.81 times with a 5.2% dividend yield. 'There's also a chance that operating expenditure comes in higher than expected, despite the group already replacing 180 employees with artificial intelligence (AI) and intending to rationalise 200 more in the next three to five years, as management repeatedly stresses that the FY29 CIR target of 40% is the hardest to achieve,' said MBSB Research. On FY26, the research house said AmBank is on track to achieve RM2bil consensus net profit figure, which implies that its upcoming first quarter ended June 30, should see a result close to RM500mil. The bank shared that key themes for FY26 will centre on operational excellence and digitalisation. On the operational front, the focus will be on mobilising end-to-end process engineering in retail banking to improve turnaround times and maintain its competitive edge. This will be coupled with continued liability management, aiming to bring funding costs closer to the overnight policy rate (OPR). On the digitalisation front, the group plans to build out its data foundation and adopt a comprehensive AI and technology suite to enhance both internal productivity and customer experience. However, analysts noted that the bank's management is taking a wait-and-see approach regarding a major investment in a new digital core, deferring the decision until a midterm strategy review. Management also guided that the recent OPR cut is expected to cause two months of margin compression as the bulk of repricing will occur in December. The estimated impact is around RM10mil per month or three to four basis points on net interest margin, HLIB Research said.
The Star
21-07-2025
- Business
- The Star
US trade talks raise possibility of more M&A interest in local banks
KUALA LUMPUR: Malaysia's potential move to ease foreign equity limits in its banking sector could open the door to increased merger and acquisition (M&A) interest from regional players, particularly targeting smaller banks such as AMMB Holdings Bhd (AmBank), MBSB Bhd , and Affin Bank Bhd , according to MBSB Research. The research house, formerly known as MIDF Research, said that while the US has reportedly asked Malaysia to lift foreign-equity restrictions in strategic sectors as part of ongoing tariff negotiations, regional investors are more likely to lead the charge. 'We think more interest will come from regional players rather than the United States, especially countries such as China and Singapore, which have a strategic stake in Malaysia,' MBSB Research said. The research house pointed out that several Western players, including Citibank and Standard Chartered, had exited the Asean market in recent years due to intense competition. MBSB Research said AmBank remains a long-discussed M&A target due to its relatively smaller size and improving fundamentals, along with speculation that founder and key shareholder Tan Sri Azman Hashim 'is willing to part with some shares if the valuation is acceptable'. For Affin Bank, the research firm noted that Bank of East Asia is understood to have been seeking to divest its stake for some time. Currently, Malaysia imposes a 30% cap on foreign ownership of commercial banks and a 70% limit for investment and Islamic banks, but these thresholds have often been bypassed. 'We think these thresholds have often been bypassed to avoid single-exposure risk, as there are not sufficient domestic investors,' MBSB Research noted. By comparison, Malaysia's rules are among the most restrictive in the region, the research house said. It said Singapore allows up to 40% foreign ownership in domestic banks, while Vietnam raised its cap to 49% for selected banks in May, up from 30%. Thailand limits foreign ownership in commercial banks to 25%. In Indonesia, the cap is 40%, but higher stakes are possible with Bank Indonesia's approval, provided the acquiring party meets requirements including public listing and sufficient capital strength. According to MBSB Research, financial liberalisation 'does have multiple benefits, most notably driving foreign direct investment interest and industry-wide improvements in efficiency and profitability. Unfortunately, this may come with large-scale rationalisation of work forces.' The research house highlighted several upsides of financial liberalisation, including increased competitiveness in the banking sector through the introduction of global expertise, advanced technology, and improved risk-management practices. It also expects higher foreign capital inflows and stronger corporate governance as a result of greater foreign participation. Additionally, MBSB Research said increased competition could lead to better service quality and higher profitability across the industry, which would support improved valuations. However, it cautioned that liberalisation may also lead to workforce rationalisation, especially as banks consolidate and continue to digitise their operations. Overall, MBSB Research maintained its 'neutral' stance on the banking sector, citing limited near-term re-rating drivers and persistent macroeconomic headwinds. The research house said it continues to favour a bottom-up stock-picking approach, with a preference for defensive names, due to the 'presence of industrywide headwinds, while tailwinds vary on a case-by-case basis'. 'An improved economic outlook remains the core re-rating driver, but we are not expecting this anytime soon,' the research house said, adding that 'sentiment is further weighed down by any possible reinstatement of the goods and services tax and petrol subsidy removal'. The research house named Public Bank Bhd and Hong Leong Bank Bhd as its top picks.
The Star
11-07-2025
- Business
- The Star
AmBank to lower standardised base, lending rates effective July 14
KUALA LUMPUR: AMMB Holdings Bhd (AmBank) will lower its Standardised Base Rate (SBR), Base Lending Rate/Base Financing Rate (BLR/BFR) and Base Rate (BR) effective July 14, 2025. In a notice on its website, AmBank said the SBR will be reduced from 3.0 per cent per annum to 2.75 per cent, while the BLR/BFR will be revised from 6.70 per cent to 6.45 per cent. It said the BR will be revised from 3.85 per cent to 3.60 per cent. "For illustration purposes and subject to change from time to time, the effective interest or profit rate for a 30-year loan or financing of RM350,000 with no lock-in period is 4.0 per cent per annum (SBR+1.25 per cent),' AmBank said. - Bernama
New Straits Times
11-07-2025
- Business
- New Straits Times
AmBank to lower standardised base, lending rates, effective July 14
KUALA LUMPUR: AMMB Holdings Bhd (AmBank) will lower its Standardised Base Rate (SBR), Base Lending Rate/Base Financing Rate (BLR/BFR) and Base Rate (BR) effective July 14, 2025. In a notice on its website, AmBank said the SBR will be reduced from three per cent per annum to 2.75 per cent, while the BLR/BFR will be revised from 6.70 per cent to 6.45 per cent. It said the BR will be revised from 3.85 per cent to 3.60 per cent. "For illustration purposes and subject to change from time to time, the effective interest or profit rate for a 30-year loan or financing of RM350,000 with no lock-in period is four per cent per annum (SBR+1.25 per cent)," AmBank said.
Borneo Post
20-06-2025
- Business
- Borneo Post
AmBank marks 50th anniversary by sponsoring RWMF for first time
Shazman says the RWMF sponsorship reflects AmBank's long-standing relationship with Sarawak. SANTUBONG (June 20): AmBank Group is marking its golden jubilee by becoming the official bank for the Rainforest World Music Festival (RWMF) 2025. The bank group's corporate communications and marketing head Shazman Shahid said the bank was proud to be supporting one of Sarawak's most prominent cultural events. 'AmBank is the official bank for this festival this year. We are thankful to the Sarawak Tourism Board (STB), and the Sarawak government as well. 'This is our first time sponsoring an event of this nature, especially in Sarawak. It's a meaningful milestone for us as we celebrate our 50th anniversary, our golden jubilee,' he said in an interview with The Borneo Post today. According to Shazman, the sponsorship reflects AmBank's commitment to the people, particularly in Sarawak. 'As a bank for the people, and with our tagline 'Your Bank, Malaysia's Bank, AmBank', we are always there for the community, especially the people of Sarawak. 'This initiative also aligns with the bank's long-standing relationship with the state. 'For decades, we have been supporting the people, and the Sarawak government, by extending our financial services and facilities.' On AmBank's presence at this year's RWMF, Shazman said the bank had already set up a booth at the venue, Sarawak Cultural Village (SCV), to provide visitors with an 'immersive AmBank experience'. 'Throughout the three days, the visitors will be able to look forward to exclusive engagements, promotions and activities to bring our brand closer to the people. 'Among these, we'll be powering onsite with our payment solutions and also offering generous discounts to our credit card customers. 'So wherever they are within the nation, they will be able to use our credit card to come over and to spend during the festival,' he said. Shazman also highlighted the alignment between AmBank's community focus and the 2025 RWMF theme, 'Connections: One Earth, One Love'. 'Our real focus is on connection. 'We want to connect with the local community, with visitors across the globe, and with many talented artists who are converging on Santubong.' On the festival's progress over the years, Shazman said AmBank had been observing the development closely before coming on board as a sponsor. 'Of course, before we started our journey to sponsor, we had studied throughout the year. 'It (RWMF) has evolved, and more and more visitors are coming over to Santubong to celebrate the festival for three days. 'The evolution of the RWMF is just amazing, seeing it grow year by year. 'Hopefully for next year, we would be able to work together with the festival organisers as well.' The RWMF, now in its 28th edition, continues to draw thousands of music lovers from around the globe to Sarawak for three days of cultural and musical exchanges. AmBank Kuching official bank rwmf
