KUALA LUMPUR (March 27): AMMB Holding Bhd (KL:AMBANK) may pay out higher than expected dividends when the sixth-largest Malaysian bank by assets announces its strong results for the current financial year.

Dividend payout has been changed to 60% ratio from the absolute 45 sen per share by the year ending March 2029 (FY2029), AMMB told analysts at a briefing. AMMB is also committed to increasing dividends on both payout ratio and an absolute basis, according to the analysts.

“As AMMB is on track to post stronger earnings growth, we expect a higher dividend payout in FY2025,” Public Investment Bank said in a note.

The consensus now expects dividend per share to rise to 27.1 sen in FY2025, according to analysts tracked by Bloomberg. Gross dividend per share in FY2024 was 22.6 sen, representing a payout of 40% of its net profit.

Shares of AMMB have risen about 3% year-to-date, tracking gains of most peers in the banking sector, thanks to strong earnings in recent quarters. In contrast, the benchmark FBM KLCI have declined 8% from the start of 2025.

AMMB has 10 “buy”, six “hold” and no “sell” calls. The average target price is RM6.23, suggesting potential upside of up to 11% in the next 12 months from its last price of RM5.63.

“Ongoing balance sheet optimisation and efficiency improvements should allow for decent earnings growth, which in turn is supportive of management’s long-term dividend payout expansion commitment,” said RHB Investment Bank.

Analysts now expect AMMB to report a net profit of about RM2 billion for FY2025, a 7% growth from FY2024. The company is expected to announce its results before the end of May.

“AMMB is well-positioned for sustained growth, with a robust loan pipeline supporting double-digit expansion in business banking and accelerated momentum in wholesale banking, underpinned by large-scale infrastructure projects,” Phillip Capital added.