KUALA LUMPUR (Aug 20): AMMB Holdings Bhd (KL:AMBANK) aims to beat its RM2 billion net profit record made in financial year 2025, despite lower net interest margins (NIMs) from the overnight policy rate (OPR) cut, supported by cost control and a strong first quarter.
Malaysia’s sixth-largest banking group by assets is bracing for margin compression in the financial year ending March 31, 2026 (FY2026), AMMB group chief executive officer Jamie Ling said NIM is expected to ease by three to four basis points following the OPR cut.
Last month, Bank Negara Malaysia cut OPR by 25 basis points to 2.75% — marking the first reduction in five years.
Ling said the group’s NIM is expected to settle around 1.96%-1.97% in the financial year.
The bank’s NIM stood at 2.01% as at end-June this year, compared to 1.79% in 4QFY2024 and 1.96% in 4QFY2025.
“That is the highest margin that we have ever achieved since I got here, and obviously we will call that peak margins, because the OPR reduction will have a negative impact on banking margins overall, and therefore we will also be impacted,” Ling said after attending the bank’s annual general meeting on Wednesday.
Ling added that the group had worked to optimise funding costs and reduce reliance on expensive deposits, which lifted margins.
“A lot of effort was put in to improve our cost of funding. As we grew more slowly in retail, it allowed us to price out deposits that are costly,” he explained.
On the other hand, Ling also expressed optimism on the bank’s earnings outlook. He said the bank is hopeful of surpassing its record RM2 billion net profit achieved in FY2025.
“We made RM2 billion last year… we want to beat the record,” he said, adding that “we did RM516 million in quarter one (1QFY2026), so we are on track.”
Ling expects the bank’s loans to grow 4% in FY2026, led by business banking and wholesale.
AMMB closed its financial year with a record net profit of RM2 billion in FY2025, a 7% increase from RM1.87 billion posted a year earlier, boosted by higher net interest income and non-interest income. In 1QFY2026, the bank posted a 3.2% rise in net profit to RM516.18 million from RM500.2 million a year ago, on higher interest and non-interest income, partly offset by increased impairment charges.
At 4pm on Wednesday, AMMB slipped two sen or 0.36% to RM5.48, giving it a market capitalisation of RM18.16 billion.