KUALA LUMPUR (Feb 26): AMMB Holdings, Malaysia’s sixth-largest banking group by assets, said on Monday its net profit rose 22% in the third quarter from a year earlier as tax credits helped offset provisions for bad loans.

Net profit for the three months ended Dec 31, 2023 was RM543.41 million versus RM444.21 million in the same period a year earlier. The company booked a one-off tax credit of RM537.6 million as well as RM435.29 million in allowances for impairment on loans, advances and financing.

AMMB took steps to increase loss loan coverage to 100% for the individual retail segment “as a prudent buffer and the further strengthening of capital ratios mean the group is on track to revert to its historical dividend payout trend”, said chief executive Jamie Ling.

“As we are in the final year of our FOCUS 8 strategy, delivering an ROE (return on equity) of 10% and the continued strengthening of the group’s capital ratio position us well into the future,” he added.

For the nine months ended Dec 31 (9MFY2024), AMMB’s net profit rose 8.59% to RM1.39 billion from RM1.28 billion while allowances for impairment on loans, advances and financing jumped to RM657.34 million against RM337.46 million a year ago.

Net interest income for the period fell by 8.7% to RM2.48 billion in 9MFY2024, but this was partially offset by a strong growth of 19.2% in non-interest income to RM995.8 million.

Net interest margin for 9MFY2024 stood at 1.79%, lower than 2.19% recorded for 9MFY2023, due to the increase in funding cost as deposits repriced upwards following a series of rises in the overnight policy rate.

Gross impaired loans ratio was higher at 1.6% compared to 1.46% in FY2023, while annualised ROE improved to 10% from 9.9% in 9MFY2023.

Customer deposits grew 4.3% year-to-date to RM135.9 billion while time deposits grew 10.6% to RM90.1 billion, offsetting a reduction in current account and savings account (Casa). Casa mix stood at 33.7% versus 37.4% in FY2023.

Shares of AMMB closed down four sen or 0.92% at RM4.31 on Monday, valuing it at RM14.28 billion.