News Column

AMMB anticipates challenging year ahead

February 18, 2014

Lidiana Rosli

KUALA LUMPUR: AMMB Holdings Bhd, which posted a 12.9 per cent rise in net profit to RM1.33 billion year-on-year for the first nine months of its financial year 2014, anticipates a challenging year ahead, given the expected slowdown in personal loan and retail segment.

"The tricky issues that we need to manage are the consumer loan to gross domestic product ratio, which has continued to increase. The regulators are looking at softening the demand, which would affect the growth of loan in the retail sector," said AMMB group managing director Ashok Ramamurthy.

He said there will also be further softening in the consumer sector as the government tackles various issues related to the budget deficit.

Speaking on the sidelines of AmBank's dual celebration of Chinese New Year and 25th year on Bursa Malaysia yesterday, Ashok noted that it was not all gloom and doom in the banking group's final quarter of its financial year 2014 and its next financial year, which begins on April 1.

"Malaysia still has a stable economy with sound liquidity. As long as the banking practice is still sound, banks would continue to generate profits for the next 12 months."

AmBank Group reported its third quarter 2014 performance on Monday, which saw growth contribution of 15.2 per cent from the retail banking sector, 54.8 per cent from general insurance and 100 per cent from life assurance and family takaful.

Ashok is confident that the bank would be able to sustain this momentum until the end of its 2014 fiscal year on March 31 2014.

"We have set a profit growth of between 10 and 12 per cent for profit after tax and non-controlling interest and a return of investment at 14 per cent among other things. Going by the first nine-month performance, we believe we can sustain this momentum," he said.

Ashok said for the next 12 months, the bank expected its non-retail segment to outperform its retail segment as it had been focusing on non-retail segment for the last three years and would continue to do so for the next two years.

He is also hopeful that AmBank's strategic partnership with insurance provider MetLife will receive approval by the closing of its 2014 fiscal year.

"We hope that the partnership will commence on April 1, but that is subjected to Bank Negara Malaysia's approval. As of now, we have yet to finalise the identity and the branding of our partnership, but all will be revealed in due time," he said.

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Source: Business Times (Malaysia)

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