AMMB Holdings Bhd, Malaysia’s fourth-biggest bank by market value, said fiscal first-quarter profit jumped 43 percent as loans climbed and it set aside fewer provisions for bad debts.
Net income climbed to RM368.3 million ($117 million), or 12.24 sen a share, in the three months ended June 30, from RM258.2 million, or 9.48 sen a share, a year earlier, the lender said in an exchange filing today. Revenue increased 8.5 percent to RM1.7 billion, it said. The shares rose.
Banks have stepped up lending after Malaysia’s economy grew 10.1 percent in the first quarter. The country’s central bank raised interest rates for a third time this year on July 8, judging the economy strong enough to withstand higher borrowing costs even as threats to the global rebound grow.
“The Malaysian banking operating environment is likely to benefit from the economic recovery, with higher lending growth and increased capital market activity,” AMMB said in its statement. “However, Malaysian banks are expected to face greater competitive pressures as the financial sector progressively liberalizes and with new entrants to the industry.”
Shares of AMMB gained 3.2 percent to RM5.42 at 2:51 p.m. local time, set for their highest close since 1997.
AMMB, which is a strategic partner of Australia & New Zealand Banking Group Ltd, said net interest income rose 25 percent to RM523.4 million in the quarter. Bad-debt provisions fell 33 percent to RM91.6 million, while contributions from Islamic finance shrank 17 percent to RM194.2 million.
The lender aims to accelerate growth in non-interest income and low-cost deposits as well as explore potential acquisitions to fill gaps in its business, it said in the release. - Bloomberg
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