AMMB Holdings: A Strong Finish to FY2025 with Robust Profit Growth and Attractive Dividends
As the curtains close on another financial year, AMMB Holdings Berhad (AMMB) has delivered its audited financial results for the fourth quarter and full financial year ended 31 March 2025. This report paints a picture of a resilient banking group demonstrating solid growth amidst a dynamic economic landscape. For Malaysian retail investors, understanding these key figures is crucial to gauging the company’s health and future trajectory.
The standout news? AMMB recorded a impressive 52.7% year-on-year surge in Profit Before Taxation and Zakat (PBT) for the full financial year, reaching RM2,587.3 million. This significant jump, coupled with a proposed final dividend of 19.9 sen per share, signals a strong performance and a commitment to shareholder returns.
Core Financial Highlights: A Year of Growth and Resilience
AMMB’s financial performance for the full financial year ended 31 March 2025 shows a commendable uptrend across key metrics, especially when considering the absence of one-off charges incurred in the previous year. Let’s dive into the numbers:
Net Income and Profitability
The Group’s net income from continuing operations saw a healthy increase, driven by expansion in both net interest income (NII) and non-interest income (NoII). This indicates a diversified and robust revenue stream.
FY2025 (Full Year)
Net Income (Continuing Ops): RM4,928.9 million
Operating Profit before Impairment Losses: RM2,731.1 million
Profit Before Taxation and Zakat: RM2,587.3 million
Profit Attributable to Equity Holders (PATMI): RM2,001.2 million
FY2024 (Full Year)
Net Income (Continuing Ops): RM4,595.5 million
Operating Profit before Impairment Losses: RM2,543.8 million
Profit Before Taxation and Zakat: RM1,694.1 million
Profit Attributable to Equity Holders (PATMI): RM1,868.1 million
Net income from continuing operations grew 7.3% year-on-year, propelled by an 8.0% rise in NII and a 5.3% increase in NoII. The NII growth was particularly supported by a 15 basis points net interest margin (NIM) expansion to 1.94%, alongside a 3.5% growth in loans and financing.
Operating profit before impairment losses for continuing operations increased by 7.4% year-on-year, showcasing improved operational efficiency despite a 7.1% rise in overall expenses, primarily from higher personnel and computerisation costs. The cost-to-income ratio remained stable at 44.6%.
The remarkable 52.7% surge in Profit Before Taxation and Zakat (PBT) is largely attributed to the absence of one-off charges totaling RM520.2 million recorded in FY2024, which included credit impairment overlay, intangible assets impairment, and restructuring expenses. This highlights a cleaner earnings profile for the current year.
Earnings Per Share (EPS)
Shareholders will be pleased to see the significant improvement in earnings per share, reflecting the increased profitability.
FY2025 (Full Year)
Basic/Diluted EPS: 60.56 sen
FY2024 (Full Year)
Basic/Diluted EPS: 55.70 sen
The basic/diluted earnings per share from continuing operations rose to 60.56 sen, up from 55.70 sen in the previous year, an increase of 8.7%. This directly translates to higher value for shareholders.
Key Ratios and Financial Health
AMMB’s financial health indicators remain robust, signaling stability and prudent management.
| Metric | FY2025 | FY2024 | Change |
|---|---|---|---|
| Return on Equity (ROE) | 10.0% | 10.0% | 0.0 pp |
| Return on Assets (ROA) | 1.02% | 0.97% | +0.05 pp |
| Gross Impaired Loans (GIL) Ratio | 1.54% | 1.67% | -0.13 pp |
| Loan/Financing Loss Coverage (LLC) | 103.6% | 109.5% | -5.9 pp |
| Loan-to-Deposit Ratio (LDR) | 98.1% | 94.2% | +3.9 pp |
| CASA Mix | 36.0% | 37.1% | -1.1 pp |
The improvement in ROA to 1.02% reflects better asset utilization. The Gross Impaired Loans (GIL) ratio saw a positive reduction to 1.54%, indicating improved asset quality, although the Loan/Financing Loss Coverage (LLC) including regulatory reserves saw a slight decrease to 103.6%. The loan-to-deposit ratio (LDR) increased to 98.1%, suggesting higher loan origination relative to deposits, while the CASA (Current Account Savings Account) mix saw a slight dip to 36.0%.
Divisional Performance: A Mixed Bag of Strengths
AMMB’s diversified business units contributed to the overall performance with varying dynamics:
- Retail Banking: Profit after taxation (PAT) significantly improved to RM174.9 million (from RM4.1 million), mainly due to lower net impairment. Gross loans, however, declined slightly.
- Business Banking: PAT surged by 39.9% to RM833.2 million, driven by higher income and lower net impairment. Gross loans increased by 12.4%.
- Wholesale Banking: Overall PAT grew by 11.4% to RM840.9 million.
- Corporate and Transaction Banking: PAT decreased by 13.3% to RM342.3 million due to lower income and higher operating expenses.
- Group Treasury and Markets: PAT soared by 38.5% to RM498.6 million, benefiting from higher income and lower impairment.
- Investment Banking and Funds Management: PAT rose by 37.5% to RM118.5 million, supported by strong fee income. Assets under management (AUM) grew 6.1%.
- Insurance (Continuing Operations): PAT increased significantly to RM101.3 million (from RM39.2 million), driven by higher premiums.
- Islamic Banking: Profit after taxation and zakat (PATZ) grew by 29.9% to RM559.3 million, primarily from a 9.6% growth in net financing income and reduced impairment charges.
Capital Position: Strong and Well-Buffered
AMMB’s capital adequacy remains a cornerstone of its financial strength. The Group’s Common Equity Tier 1 (CET1) Capital Ratio, post-dividend, stood strong at 14.82%, up from 13.04% (Standardised Approach) in the previous year. The Total Capital Ratio (TCR) also improved to 17.49% from 16.30% (Standardised Approach).
Risks and Prospects: Navigating a Complex Global Environment
While AMMB has demonstrated resilience, the global economic outlook presents both opportunities and challenges. The report highlights key external risks:
- Global Economic Uncertainty: The Federal Reserve’s cautious stance due to rising inflation and potential higher unemployment, coupled with heightened geopolitical tensions from US tariffs and new conflicts in South Asia, could impact business and consumer confidence globally.
- Trade Policy Shifts: As an open economy, Malaysia is vulnerable to global trade policy shifts. While a 90-day truce in US-China trade tensions offers some relief, the potential for prolonged economic damage from tariffs remains a downside risk.
- Monetary Policy Divergence: The European Central Bank’s dovish bias with recent rate cuts contrasts with the US Fed’s wait-and-see approach, creating a complex global monetary environment.
Despite these external headwinds, Malaysia’s economy is projected to grow by 3.5% to 4.5% in calendar year 2025, primarily driven by resilient domestic demand, a stable labour market, tourism recovery, and ongoing infrastructure projects. A sharp slowdown or recession is considered unlikely. Bank Negara Malaysia (BNM) is expected to maintain a measured approach to monetary policy, with a potential 25 basis points rate cut in the second half of calendar year 2025, possibly as early as July.
The Malaysian banking sector continues to show resilience, with ample liquidity and strong capitalisation. Industry outstanding loans grew by an average of 5.4% year-on-year in the first quarter of calendar year 2025, with household loans expanding by 6.0% and non-household loans by 4.5%. The liquidity coverage ratio stands at a healthy 151.6%, and loan-to-fund ratios remain stable.
Shareholder Returns: A Commitment to Dividends
AMMB’s commitment to returning value to shareholders is evident in its dividend announcement. The Group proposed a final dividend of 19.9 sen per share for the fourth quarter of FY2025. Combined with the interim dividend of 10.3 sen per share declared earlier, the total dividends for FY2025 amount to 30.2 sen per share, representing a significant 34% increase year-on-year. This translates to a dividend payout ratio of 50%, a strong signal of confidence in future earnings.
Summary and
AMMB Holdings has concluded its financial year 2025 with a strong performance, marked by significant profit growth, particularly due to the absence of one-off charges from the previous year. The expansion in net interest margin, robust loans growth in key segments like Business Banking and Wholesale Banking, and a healthy capital position underscore the Group’s operational effectiveness and financial stability. While external geopolitical and trade tensions present a challenging backdrop, Malaysia’s domestic economic drivers are expected to provide a buffer, ensuring continued growth for the banking sector.
Key positive factors from this report include:
- Substantial year-on-year profit growth, particularly in Profit Before Taxation and Zakat, indicating improved underlying earnings.
- Healthy Net Interest Margin expansion and strong loans growth, especially in Business Banking.
- Improved asset quality with a lower Gross Impaired Loans ratio.
- Robust capital adequacy ratios, providing a strong buffer against potential economic shocks.
- A significant increase in total dividends per share and a solid payout ratio, demonstrating a commitment to shareholder returns.
Looking ahead, AMMB appears well-positioned to navigate the evolving economic landscape, leveraging its diversified business segments and solid financial foundation. The focus on domestic demand and the overall resilience of the Malaysian banking sector will be crucial in sustaining its momentum.
What are your thoughts on AMMB’s performance and its ability to maintain this growth trajectory in the coming years? Share your insights in the comments below!
