马来西亚股票分析报告

28 July 2025

AMMB (AMM MK)

WT29 Year 2: Steadfast Execution

Share Performance (%)

Source: Bloomberg

• Stay NEUTRAL, with new MYR5.50 TP from MYR5.70, 7% upside and c.6% FY26F (Mar) yield. AMMB’s Strategy Day event hosted last Friday showcased the group’s steady progress towards its Winning Together 2029 (WT29) aims. While the recent cut to the overnight policy rate (OPR) could put pressure on earnings growth in FY26F, we think the group’s longer-term plans – especially for greater dividend distribution – remain intact.
• Reaffirms WT29 targets. Management reiterated its longer-term targets under the WT29 strategic roadmap – these include an operating income CAGR of 8% supported by loans and deposits CAGRs of 6%, and net profit CAGR of 8%. Ultimately, it aspires to achieve a 40% CIR (FY25: 44.6%) and 1.1% ROA (FY25: 1.02%). The group also reiterated its gradual dividend expansion plan, with a terminal payout ratio target of 60% by FY29.
• Longer-term profit drivers are progressing well. Despite a YoY contraction in its retail CASA mix (21% in FY25 vs 26% in FY24), management is optimistic on its ability to win “sticky” retail CASA moving forward. It has multiple brand partnerships to aid with visibility, and is also set to launch its new employee banking proposition soon, with a focus on gaining payroll CASA from its business banking clients. Elsewhere, business banking loans growth (+12% YoY in FY25) continues to remain strong, partly supported by AMMB’s sub-segment specific growth strategies. It is also seeing resilient demand from prospective Chinese clients intending to establish in Malaysia to capture this business, AMMB has partnered with several Chinese banks in Malaysia to provide payroll, current accounts and balance sheet support to those customers. Finally, management reiterated its focus on supply chain financing as a key driver for its non-retail business lines.
• Near-term financial guidance. Management expects a 1QFY26 performance that is in line with its FY24-29F net profit CAGR aspiration of 8%. Recall that in FY25 – ie Year One of WT29 – AMMB achieved net profit growth of 7% YoY, just slightly trailing the longer-term target. With respect to the central bank’s recent 25bps OPR cut, management expects near-term NIM compression due to the timing mismatch between the repricing of loans and deposits, but expects the effect to wane over 9-10 months as the bulk of FDs would have been repriced then. Over a 12-month period with all else remaining equal, the group expects a 3bps NIM compression from the OPR cut, which includes the estimated uplift from the 1ppt cut in the statutory reserve requirement.
• We trim our FY26F earnings by 1% to factor in the latest guidance on the OPR cut impact, but lift FY27F-28F by 1-3% as we assume stronger NIM from further asset and liability optimisation. We lower our TP to MYR5.50 from MYR5.70, which includes an unchanged ESG premium of 4%.

Forecasts and Valuation

Source: Company data, RHB

Overall ESG Score: 3.2 (out of 4)

• E Score: 2.8 (GOOD)
• S Score: 3.8 (EXCELLENT)
• G Score: 3.5 (EXCELLENT)

Please refer to the ESG analysis on the next page

Emissions And ESG

Trend analysis

AMMB’s FY25 (Mar) emissions posted a sharp 62% YoY increase largely as a result of an expansion of Scope 3 emissions scope to include waste directed to disposal and employee commute.

Source: Company data, RHB

Latest ESG-Related Developments

Offers flood relief assistance: AMMB announced several relief initiatives for customers affected by recent floods in East Malaysia – these include a moratorium period of up to six months, as well as certain waivers.

Ramping up financing of green property: AMMB recently announced partnerships with several developers of green-certified development projects – including a MYR450m facility to Eastern & Oriental (EAST MK, BUY, TP: MYR1.17) as well as a MYR130m facility to Avaland (AVALAND MK, NR).

GVC Programme: AMMB is the official banker for Kossan Rubber Industries’ (KRI MK, SELL, TP: MYR1.23) Greening Value Chain (GVC) programme, which assists SMEs in implementing ESG-related changes to their operations, including helping out in climate reporting.

ESG Unbundled

Overall ESG Score: 3.2 (out of 4)
Last Updated: 28 July 2025

E Score: 2.8 (GOOD)
AMMB’s FY25 GHG emissions now includes an expanded scope, covering waste directed to disposal and employee commute. During the financial year, the group mobilised c.MYR15bn in sustainable financing, largely through green fixed income investments. AMMB’s business banking customers were some of the largest recipients of the group’s green financing facilities, deployed towards sectors such as logistics, technology and sustainable property development.

S Score: 3.8 (EXCELLENT)
AMMB is engaged in numerous programmes to assist MSMEs with capacity building and digitalisation, including being the initial anchor bank supporting the central bank’s Greening Value Chain programme. The bank’s employees are decently diverse (62% are women) and well-trained (average of >70 training hours pa).

G Score: 3.5 (EXCELLENT)
AMMB has 89% independence at the Board level, with its sustainability direction overseen by a dedicated Group Sustainability and Climate Risk Council. The Group CEO and his direct reportees are also assessed on sustainability-linked performance indicators, among others. Selected indicators in the FY25 Sustainability Report had obtained external assurance.

ESG Rating History

[Chart showing ESG rating history: 3.0 from Jul-23 to Jan-24, then 3.2 from Mar-24 to Jul-25]

Source: RHB

Financial Exhibits

Company Profile

AMMB provides a wide range of financial products and services. Its business divisions and associates cover retail banking, business banking, transaction banking, corporate and institutional banking, investment banking including fund management and stockbroking, equity markets, general insurance, life assurance and takaful. These business divisions offer both conventional and Islamic financial services.

Financial summary (MYR)

Valuation metrics

Income statement (MYRm)

Balance sheet (MYRm)

Asset quality and capital

Source: Company data, RHB

Strategy Day Highlights

Retail banking

• Management intends to gradually decrease its exposure to the mass market mortgage segment (ie property values MYR1m) mortgage segments. AMMB is comfortable with taking a hit on NIM if it can secure high credit quality customers with strong cross-sell potential into the group’s wealth offerings.
• Another new driver for AMMB’s retail banking business is in the used foreign car financing space, where management targets for a third of its HP portfolio to come from used foreign car financing. To that end, management thinks its competitive advantage lies in the integrability of partners’ Application Programming Interface (API) into AMMB’s own (enabled by internal technology), allowing for simplified car price valuation and customer consent processes for loan pricing among others.
• AMMB recently launched a salary deduction personal financing product for both its own employees and business banking customers. Credit quality for these products tends to be better safeguarded due to the salary deduction mechanism. This product will be a feature of the group’s wider employee banking proposition, which has a focus on obtaining payroll CASA from employees of its business banking customers.
• AMMB is exploring the potential for credit card applications (including e-KYC processes) to be fully digitalised via its mobile application. This should help with improving the “stickiness” of its CASA customers, while also lifting the appeal of the group’s CASA offerings.
• Brand partnerships – including with Baskbear Coffee, Enrich and BonusLink – form an integral part of AMMB’s retail CASA strategy. These aid with brand visibility especially among new-to-bank younger-generation customers.

Business banking

• AMMB has developed specific lending programmes for different sub-segments of its business banking customers (categorised by revenue base), through which it can offer more bespoke financial solutions (eg loans and deposits, FX & hedging, bancassurance).
• In terms of key growth geographies, these remain as before, ie Klang Valley, Penang, Johor and Sarawak. The group is in the midst of expanding its network of relationship managers particularly to serve these markets.
• To capture incoming foreign direct investment (FDI) from China, AMMB has partnered with several Chinese banks in Malaysia to tap into the base of Chinese customers that are keen on expanding operations in the country. As part of the partnership agreements, AMMB is able to offer the customers payroll accounts, operating accounts, and balance sheet support, among others.
• Management has not observed a noticeable slowdown in demand for business banking loans despite the macroeconomic and geopolitical uncertainty. In fact, it is seeing even more interest particularly from Chinese clients, where tariff differentials could accelerate any China Plus One plans.
• Management thinks the biggest challenge to achieving the segment’s 11% FY24-29F PATMI CAGR target under WT29 lies in asset quality and credit costs, rather than income generation. To that end, management has already put in place behavioural early warning triggers and other mitigating factors, but a big emphasis is also placed on underwriting high quality new credit.

Wholesale banking

• The wholesale banking segment, together with the business banking segment, will share a joint focus on supply chain financing. Key target sectors include manufacturing (automotive high tech valley, EVs), green energy (solar, hydropower) and telecommunications (5G rollout), partly in support of national development agendas.
• Under WT29, the wholesale banking division also has a focus on driving further business from its “Next20 clients” (ie largest 21-40 clients) to reduce the group’s reliance on its largest 20 clients.
• In FY26F, management will also focus on expanding its product structuring capabilities, including collaborating with the Integrated Wealth Management (IWM) team to roll out new and more sophisticated structured investment products.
• Recall that in FY25, the division posted a segmental PATMI of MYR841m, up 11% YoY – this compares against its FY24-29F CAGR aspiration of 5%. While its strong FY25 performance was partly a result of chunky recoveries, management expects significant recoveries to be a recurring theme in FY26F as well.

Integrated wealth management

• AMMB’s IWM AUM stood at MYR68bn in Mar 2025, a 3% increase YoY. Of this, MYR52bn was under the funds management arm, a record high for that sub-segment of IWM.
• As part of its growth strategy, the IWM division will target high-growth and underserved segments namely Johor and Sarawak, affluent bumiputera business owners, and high margin products. Growth in high margin products constitutes a focus on in-house flagship funds, promotion of in-house managed funds through direct sales teams and institutional unit trust advisors, and to convert selected feeder funds into in-house managed funds.
• In its private banking segment, the group intends to expand client-manager coverage and widen its customer base by focusing on underserved segments eg Muar, Batu Pahat, and Melaka, expanding its regional footprint in Johor to capitalise on upcoming developments, and to capitalise on government initiatives for single family offices.

Operations, technology and financial technology

• Under WT29, management intends to optimise the group’s CIR to 40% by FY29F (FY25:44.6%), through cost-reduction measures eg end-to-end automation process re-engineering for middle and back offices to eliminate inefficiencies, reduce redundancies, and enhance customer experiences.
• AMMB is embarking on artificial intelligence (AI) and machine learning programmes to raise efficiency, including for areas such as credit risk scoring, and credit paper automation. Despite the group-wide adoption of digital and AI tools, AMMB does not intend to downsize its workforce, and instead, will redirect resources towards other focus areas.
• AMMB is invested in growing digital talent for the nation. It has recently announced a partnership to sponsor 42 Malaysia (a national digital talent initiative by Sunway Group (SWB MK, BUY, TP: MYR5.81) and Khazanah Nasional), while AMMB is also set to host its inaugural hack-a-thon competition soon.

Revisions to estimates

We lightly adjust our FY26F-28F earnings to incorporate:

1. Some NIM compression in FY26F due to the recent OPR cut. This is mitigated by the group’s continued optimisation of its assets and liabilities mix, leading to stronger NIM and NII in FY27F-28F;
2. Slightly improved credit costs to factor in resilient recoveries and stable future NPL formation;
3. We raise our DPS assumptions for FY27-28 in line with the upwards earnings adjustments, while we maintain that for FY26F as we think the group’s strong capital position can enable it to raise its payout despite expectations of some slight YoY net profit contraction. Our FY26F-28F DPS translate to payout ratios of 53%, 55% and 57%.

Figure 1: AMMB – revisions to earnings forecasts

Source: Company data, RHB

Valuation and TP

We lower our TP slightly to MYR5.50 (from MYR5.70), based on a slightly lower P/BV of 0.83x (from 0.86x). The sole change to our GGM inputs was to ROE, which we lowered to 9.3% from 9.5% in tandem with our FY26F cut. While we have no major concerns on AMMB, its largest catalyst in our view, ie successful execution of its WT29 strategy, will only play out over a long period. In the near term, we prefer larger cap, defensive banks to weather through market uncertainties.

Figure 2: AMMB – GGM valuation with ESG overlay

Source: Company data, RHB

Figure 3: AMMB’s 12-month forward consensus P/E

[Chart data indicates forward P/E ranging between 6.0x and 16.0x, with a mean of 9.9x, +1SD at 12.2x, and -1SD at 7.6x from Jan-09 to Jan-25.]

Source: Bloomberg, RHB

Figure 4: AMMB’s 12-month forward consensus P/BV

[Chart data indicates forward P/BV ranging from 0.0x to 2.0x, with a mean of 0.97x, +1SD at 1.34x, and -1SD at 0.59x from Jan-09 to Jan-25. ROE (RHS) is also shown.]

Source: Bloomberg, RHB

Recommendation Chart

Source: RHB, Bloomberg