KUALA LUMPUR (Aug 18): AMMB Holdings Bhd (KL:AMBANK), which posted a 3.2% rise in net profit for the first quarter ended June 30, 2025, expects the recent overnight policy rate (OPR) cut to put pressure on its net interest margins (NIMs) in the near term.
Net profit for the quarter was up to RM516.18 million from RM500.2 million a year ago, according to its filing with the bourse, on higher interest and non-interest income, partly offset by increased impairment charges.
AMMB’s chief executive officer Jamie Ling flagged pressure on margins from the OPR cut to 2.75% in his commentary on prospects.
Net interest income — a measure of profitability from interest charged on loans after paying returns on deposits — rose 7.4% year-on-year to RM924.7 million, underpinned by a 12-basis-point expansion in NIM to 2.01% in the quarter under review.
Non-interest income climbed 15.2% to RM366 million from a year ago, mainly on the back of higher securities trading gains in group treasury and markets, alongside stronger fee income from corporate and business banking.
Net impairment charges jumped to RM72.4 million from RM12.3 million a year ago, owing to higher Stage 3 provisions from business banking and lower forward-looking writebacks.
No dividend was declared for the quarter under review.
As at June 30, 2025, AMMB’s total gross loans, advances and financing stood at RM138.2 billion, down 0.5% from RM138.9 billion in FY2025 ended March 31 due to repayments in wholesale banking loans.
Total customer deposits contracted 2.5% to RM138 billion from RM141.5 billion in FY2025, while current account savings account balances slid 8.1% to RM46.9 billion from RM51 billion.
AMMB’s common equity tier 1 capital ratio, a measure of a bank’s capital strength based on the highest quality of regulatory capital, improved slightly to 14.90% from 14.82% in FY2025.
At Monday's noon break, shares of AMMB — Malaysia’s sixth-largest banking group by assets — slipped five sen or 0.91% to RM5.46, giving it a market capitalisation of RM18.1 billion.