AmBank Group’s FY25 Performance: A Record-Breaking Year with Strong Dividends and Strategic Focus
Greetings, fellow Malaysian investors! Today, we’re diving deep into the latest financial performance of
This report unveils a period of significant growth and strategic milestones, highlighted by
Such figures not only demonstrate the Group’s robust financial health but also signal a strong return to shareholders. Let’s unpack the key takeaways and understand what’s driving AmBank’s momentum.
Core Data Highlights: A Closer Look at AmBank’s Financial Engine
AmBank Group has delivered an impressive set of results, showcasing growth across several key metrics. The Group’s strategic initiatives appear to be bearing fruit, contributing to a notable improvement in profitability.
Overall Financial Performance:
The Group’s financial performance in FY25 demonstrates a strong upward trajectory, particularly in profitability, driven by improved net interest income and significantly lower impairment charges.
FY25 Key Financials
Net Interest Income (NII): RM3,569.6 million (+8.0% Year-on-Year)
Non-Interest Income (NoII): RM1,359.4 million (+1.3% Year-on-Year)
Net Income: RM4,928.9 million (+6.1% Year-on-Year)
Expenses: RM2,197.8 million (+7.1% Year-on-Year)
Profit Before Provisions (PBP): RM2,731.1 million (+5.2% Year-on-Year)
Net Impairment Charges: RM143.9 million (Significantly lower)
Profit Before Taxation (PBT): RM2,587.3 million (+14.2% Year-on-Year)
Profit After Taxation and Minority Interests (PATMI): RM2,001.2 million (+7.1% Year-on-Year)
Basic Earnings Per Share (EPS): 60.56 sen (+7.2% Year-on-Year)
Return on Equity (ROE): 10.0%
Return on Assets (ROA): 1.02%
FY24 Comparison
Net Interest Income (NII): RM3,304.2 million
Non-Interest Income (NoII): RM1,342.4 million
Net Income: RM4,646.6 million
Expenses: RM2,052.1 million
Profit Before Provisions (PBP): RM2,594.9 million
Net Impairment Charges: RM769.7 million
Profit Before Taxation (PBT): RM2,265.4 million
Profit After Taxation and Minority Interests (PATMI): RM1,868.1 million
Basic Earnings Per Share (EPS): 56.49 sen
Return on Equity (ROE): 10.0%
Return on Assets (ROA): 0.97%
The significant reduction in net impairment charges (from RM769.7 million in FY24 to RM143.9 million in FY25) was a key factor boosting profitability. This was mainly due to improved Expected Credit Loss (ECL) flow rates and a writeback of forward-looking provisions. The absence of one-off charges of RM520.2 million incurred in FY24 further amplified the reported Profit Before Taxation growth to a remarkable 48.2% Year-on-Year.
Balance Sheet Strength:
AmBank Group maintains a robust financial position, characterized by healthy loan growth, improved asset quality, and strong capital adequacy.
FY25 Balance Sheet & Capital
Gross Loans, Advances & Financing: RM138.9 billion (+3.5% Year-on-Year)
Gross Impaired Loans (GIL) Ratio: 1.54% (Lower)
Loan Loss Coverage (LLC) Ratio (incl. regulatory reserves): 103.6%
Customer Deposits: RM141.5 billion (-0.6% Year-on-Year)
Current Account and Savings Account (CASA) Balances: RM51.0 billion (-3.3% Year-on-Year)
Common Equity Tier 1 (CET1) Ratio (post dividend): 14.82%
Total Capital Ratio (TCR) (post dividend): 17.49%
FY24 Comparison
Gross Loans, Advances & Financing: RM134.1 billion
Gross Impaired Loans (GIL) Ratio: 1.67%
Loan Loss Coverage (LLC) Ratio (incl. regulatory reserves): 109.5%
Customer Deposits: RM142.35 billion
Current Account and Savings Account (CASA) Balances: RM52.8 billion
Common Equity Tier 1 (CET1) Ratio (SA): 13.04%
Total Capital Ratio (TCR) (SA): 16.30%
The Group’s loan growth was primarily driven by the Business Banking and Wholesale Banking segments, which saw increases of 12.4% and 6.8% respectively, offsetting a decline in Retail Banking loans. While total customer deposits saw a marginal decrease, the Group’s capital position remains exceptionally strong, well above regulatory requirements, indicating a solid foundation for future growth.
Generous Dividends:
AmBank Group declared a final dividend of 19.9 sen per share for Q4FY25. This brings the total dividend for FY25 to 30.2 sen per share, marking a significant
and translating to a healthy dividend payout ratio of 50%. This reflects the Group’s confidence in its performance and its commitment to returning value to shareholders.
FY25 Dividends
Total Dividend Per Share: 30.2 sen
Dividend Payout Ratio: 50%
FY24 Dividends
Total Dividend Per Share: 22.54 sen
Divisional Performance Snapshot:
- Retail Banking: Profit After Taxation (PAT) significantly improved to RM174.9 million (FY24: RM4.1 million), mainly due to lower net impairment charges.
- Business Banking: PAT grew by 39.9% Year-on-Year to RM833.2 million, driven by higher income and lower net impairment. This segment saw strong loan growth.
- Wholesale Banking: PAT increased by 11.4% Year-on-Year to RM840.9 million, supported by higher income and net impairment writebacks.
- Islamic Banking: Profit After Taxation and Zakat (PATZ) expanded by 29.9% Year-on-Year to RM559.3 million, primarily due to growth in Net Financing Income.
- Insurance: PAT from continuing operations saw a substantial increase to RM101.3 million (FY24: RM39.2 million), largely from higher premiums collected.
Navigating the Headwinds: Risks and Prospects for FY26
While AmBank Group has closed FY25 on a strong note, the outlook for FY26 presents a mixed bag of opportunities and challenges, particularly from the global economic landscape.
AmBank Group Chief Executive Officer, Mr. Jamie Ling, highlighted the increasing geopolitical tensions, specifically mentioning the US reciprocal tariffs and emerging conflicts in South Asia. These factors are contributing to significant volatilities in global financial markets. The uncertainty surrounding trade negotiations and regional stability could inevitably impact business and consumer confidence, potentially leading to slower economic growth.
Despite these external pressures, AmBank Group is not resting on its laurels. Their strategy for FY26 involves a proactive approach to risk management, ensuring their profiles are carefully managed while simultaneously identifying and capitalising on emerging opportunities. This proactive stance is crucial in a dynamic global environment.
Furthermore, as the Group celebrates its 50th Anniversary this year, there’s a renewed focus on continuous improvement in services to enhance customer engagement. This commitment to strengthening customer relationships and reinforcing their brand identity (“Your Bank. Malaysia’s Bank. AmBank.”) is a key strategic pillar that could help them navigate challenging times and maintain a competitive edge.
Summary and Outlook
AmBank Group’s FY25 report paints a picture of a financial institution firing on all cylinders, achieving record profits and demonstrating a strong commitment to shareholder returns through increased dividends. The significant improvement in profitability was largely driven by robust income growth and a notable reduction in impairment charges, reflecting sound asset quality management.
However, the journey ahead is not without its challenges. The Group acknowledges the global economic uncertainties stemming from geopolitical tensions and trade dynamics. Their proactive risk management and focus on customer engagement will be vital in navigating these headwinds.
Key points from the report that stand out:
- Record PATMI of RM2.0 billion, indicating strong operational performance.
- Substantial increase in total dividends to 30.2 sen per share, a 34% Year-on-Year rise, showcasing confidence and shareholder value creation.
- Significant reduction in net impairment charges, a key driver for enhanced profitability.
- Robust capital position with strong CET1 and TCR ratios, providing a solid buffer against market volatility.
- Growth in Business Banking and Wholesale Banking segments, demonstrating diversified income streams.
- Acknowledgement of global geopolitical and economic risks, coupled with a proactive management strategy.
Looking forward, AmBank’s strategic emphasis on building businesses from a position of strength and enhancing customer experiences aligns well with the need for resilience and adaptability in the current economic climate. Their ability to maintain this growth momentum amidst the evolving global landscape will be a key area to watch.
Final Thoughts and Your Perspective
From a professional standpoint, AmBank’s FY25 results are certainly commendable, especially the impressive profit growth and the increased dividend payout. The reduction in impairment charges is a testament to effective risk management and a healthier loan book. It’s encouraging to see a Malaysian banking group not only performing well but also proactively addressing potential global economic slowdowns.
The Group’s commitment to its “WT29 strategy” and its 50th-anniversary initiatives focusing on customer engagement are positive signs for long-term sustainability.
What are your thoughts on AmBank Group’s latest performance? Do you believe the Group can maintain this growth momentum in the next few years, especially with the prevailing global uncertainties? Share your insights and views in the comments section below!
