AMMB wants to be among the top four banks in Malaysia by 2020

KUALA LUMPUR: AMMB Holdings Bhd, which registered a 46.7% decline in fourth-quarter net profit for fiscal year 2016 (FY16), aims to be one of the top four banking groups in the country by 2020 with the focus on cards, transaction banking, markets and wealth management segments.
"Our focus is on wealth, cards and merchants as well as CASA (current account savings account). If we put a number to those areas, we should be able to achieve the revenue that we want in the next four years," group CEO Datuk Sulaiman Mohd Tahir told a press conference last Friday in conjunction with the release of its financial results.
However, AMMB, the sixth largest bank by market capitalisation, did not disclose specific targets in its aim to become a top-four banking group.
Sulaiman said the group has no plans to go abroad for the time being as there are a lot of opportunities within the country, but noted that it does not preclude it from having partnerships and arrangements with foreign parties.
On the recent base rate increases by Hong Leong Bank, Public Bank and Standard Chartered Bank, Sulaiman said AMMB it will not follow suit at the moment. "But certainly it's something we'll look at if there is a hike in terms of cost of funding. There is a lot of competition for deposits, so we'll not preclude that if we need to do that."
Sulaiman expects AMMB's net interest margin to remain flat in FY17 after having dropped 41 basis points to 2.02% in FY16. AMMB's loan growth is projected to be in line with market performance, with the gross impaired loan ratio to be less than 2%, according to him. In FY16, the group's gross loans were flat at RM87.9 billion against RM87.8 billion in FY15.
Meanwhile, Sulaiman said AMMB has appointed a new head of compliance following the RM53.7 million penalty imposed by Bank Negara for the non-compliance by its consumer banking and Islamic banking units.
"We'll meet with the central bank quarterly to make sure that things are put in place and we've commitment of RM25 million per year for four years for investment in systems, infrastructure and training,” he stressed.
For the fourth quarter ended March 31, 2016 (FY16), AMMB’s net profit contracted 46.07% to RM280.02 million from RM519.22 million in the previous corresponding period, mainly due to lower net interest income, Islamic banking and insurance business.
Revenue for the quarter under review slipped 5.25% from RM2.22 billion to RM2.1 billion.
It has proposed a final dividend of 10.5 sen per share.
Full-year net profit went down 32.13% from RM1.92 billion to RM1.3 billion on the back of a 7.95% dip in revenue from RM9.14 billion to RM8.42 billion.
For FY17, AMMB has set a net earnings target of 10% growth, return on equity of 9.5% to 10.5% and a better dividend payout of 40% compared with 36% in FY16.