KUCHING: AMMB Holdings Bhd’s (AmBank) ‘Top 4 Strategy’ has ensured that the group is on a strong footing to navigate the economic uncertainties and challenges, particularly given the current Coronavirus Disease 2019 (Covid-19) pandemic situation.
In a press statement in line with its financial year 2020 (FY20) results announcement, AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir commented, “With the end of the 2020 fiscal year, we mark the conclusion of AmBank Group’s Top 4 Strategy.
Over these four years, we have made significant strides in transforming our business. The strong growth we have been able to record in our targeted segments and products is testament to the success of our strategy.
“We also placed targeted emphasis on strengthening our digital capabilities and strategic partnerships. Equally, we have improved our operating leverage, rationalised our cost base and established a much firmer foundation for the group.
“Clearly, we have a stronger balance sheet now and we are well-capitalised and more diverse in our liquidity profile compared to just four years ago.
“We are certain AmBank Group is on a strong footing to navigate the economic uncertainties and challenges, particularly given the current Covid-19 pandemic. We remain committed to support our people, customers and communities during this unprecedented period.”
He added, “We started FY20 strongly, achieving over RM1 billion of core revenue in the first three quarters of the year, with higher net interest income and stronger trading and fee income, while the final quarter’s performance was impacted by the Covid-19 pandemic. Operational efficiency continued to improve our operating leverage, with cost-to-income ratio at 49.9 per cent, from 54.3 per cent a year ago.
“Consequently, the group’s profit before provisions grew by 18.3 per cent. In light of the economic disruption resulting from the Covid-19 pandemic and amidst the decrease in global oil price, the group has set aside an additional macro provision of RM167.3 million in the fourth quarter to reflect a more challenging outlook.
“ As a result, our net credit cost for the year increased to 30bps from a net recovery position last year. Higher net provisions impacted our PATMI which stood at RM1,340.7 million.
“However, included in the previous year’s result was a one-off gain from the retail NPL sale of RM285.0 million. In fact, our underlying PATMI of RM1,467.9 million was up 15.4 per cent year on year, after normalising the one-off gain and the additional macro provision that was set aside as additional prudence.
“We are pleased to declare a final dividend of 7.3 sen per share, bringing total dividend for the year to 13.3 sen and a dividend payout ratio of 30 per cent. This year’s payout is a reflection of a more cautious outlook, in the light of the economic impact of the Covid-19 pandemic in the near term.”
AmBank reported that its total income rose 7.8 per cent to RM4,227.2 million, as a result of net interest income (NII) growth of 7.5 per cent to RM2,773.9 million and non-interest income (NoII) growth of 8.3 per cent to RM1,453.2 million.
Its profit before provisions (PBP) increased by 18.3 per cent to RM2,119.0 million while net profit after tax and minority interests (PATMI) declined 10.9 per cent to RM1,340.7 million.
Underlying PATMI was up 15.4 per cent (adjusted for the gain on retail debt sales of RM285.0 million in FY19 and the macro provision of RM167.3 million in FY20).