KUALA LUMPUR: AMMB Holdings Bhd's core net profit has exceeded Public Investment Bank's (PublicInvest) consensus expectations, reaching 105 per cent and 107 per cent for the full year forecasts.
AMBB's core net profit was RM1.80 billion, marking a 1.4 per cent year-over-year increase.
"This figure excludes several one-off items, including a RM112 million impairment of intangible assets, an RM80 million restructuring expense charge, RM328 million in credit impairment overlays, and RM538 million in tax credits," it said in a note.
AMMB's total income from continuing operations for financial year 2024 (FY24) decreased by 0.6 per cent year-over-year to RM4.65 billion.
"This decline was due to a 6.7 per cent drop in net interest income (NII) to RM3.30 billion, caused by margin compressions, which was offset by a 14.6 per cent increase in non-interest income (NoII) to RM1.34 billion," it added.
Additionally, AMMB's net interest margin (NIM) remained stable at 1.79 per cent in the fourth quarter of financial year 2024 (4QFY24), the same as the third quarter, having already decreased by 29 basis points over the year.
"This suggests that the worst of the margin compressions may be over. With steadier asset yields from improved and targeted loan growth, coupled with the group's relatively healthy Current Account Savings Account (CASA) ratio of 37.1 per cent amid less aggressive rate competition, NIMs are expected to average around 1.85 per cent going forward,"
PublicInvest notes encouraging signs for AMMB's future performance, such as improvements in net credit costs and the potential for margin expansions.
"We remain encouraged over AMMB's long-term prospects, reflected by these steady improvements on the operational front.
"Despite these positive developments, we are maintaining our earnings estimates but have raised our dividend-based target price to RM4.80 as we update our base valuation year," it added.
PublicInvest has upgraded its recommendation to 'trading buy' due to the potential upside in the share price.
