KUALA LUMPUR (Feb 20): AMMB Holdings Bhd's (KL:AMBANK) earnings were lower in the third quarter ended Dec 31, 2024 (3QFY2025) due to higher operating expenses and lower income from Islamic banking, despite an increase in net interest income.

During the quarter under review, net profit attributable to shareholders fell 10.48% to RM486.49 million from RM543.41 million in 3QFY2024, according to a filing with Bursa Malaysia on Thursday. Earnings per share stood at 14.71 sen, down from 16.42 sen in 3QFY2024.

In the corresponding quarter last year, the banking group booked a tax credit of RM539.7 million.

Meanwhile, 3QFY2025 revenue increased 7.75% to RM1.24 billion, from RM1.15 billion in the same quarter last year.

AmBank did not declare any dividends for the quarter under review.

During the quarter, the bank's net interest income (NII) rose more than 12% to RM603.7 million from RM537.1 million a year ago, but Islamic banking income declined 9.54%, amounting to RM258.75 million.  

For the nine months ended Dec 31, 2024 (9MFY2025), the banking group's net profit increased nearly 5% to RM1.48 billion, from RM1.39 billion a year ago.

Revenue rose 6.47% to RM3.65 billion, from RM3.48 billion for 9MFY2024.

"We delivered another strong quarter of earnings, and our year-to-date (YTD) results for the nine months have been encouraging," Jamie Ling, AmBank's group chief executive officer, said in a separate media release.

NII grew 7.8% year-on-year (y-o-y) to RM2.67 billion for 9MFY2025, compared with RM2.48 billion last year, thanks to net interest margin expansion of 15 basis points, and growth in loans and financing.

Gross loans, advances and financing increased 4.4% y-o-y to RM131.7 billion, driven by business banking loan growth of 15.2% y-o-y, partially offset by a RM800 million decline in retail banking, and flat growth in wholesale banking loans.

Non-interest income decreased 2.3% y-o-y to RM972.6 million for 9MFY2025, down from RM995.8 million previously, due to the non-repeat RM51.1 million AmGen divestment gain in 9MFY2024, and lower global transaction banking trading gains, partially offset by higher fee income from business banking, wealth management and investment banking.

The gross impaired loan ratio remained steady at 1.67%, while the loan loss coverage ratio including regulatory reserves stood at 101.8%. 

"Our liquidity levels continue to be ample and our capital levels strong,” Ling said.

“We continue to focus on our key strategic priorities, and we are executing well in our first year of the WT29 strategy," he said in the media release for AmBank's FY2025 outlook.

Customer deposits fell 2.8% YTD to RM138.4 billion, as the management’s effort to improve margins continued. Time deposits grew 4.7% YTD to RM93.8 billion. 

Current account and savings account (Casa) balances fell 15.4% YTD to RM44.6 billion, with a Casa mix of 32.2%.

The group’s common equity Tier 1 (CET1) ratio stood at 14.88%, with the total capital ratio at 17.62%. The CET1 ratio, including 3QFY2025 unverified profits, was at 15.33%, with the total capital ratio at 18.07%.

At Thursday's midday market break, AmBank shares were down three sen or 0.5% at RM5.79, valuing the company at RM19.2 billion. YTD, the stock has gained 5.66%.