Maybank IB commends AMMB 3QFY23 results which came in above expectations, in view of this the research bank is raising its FY23/24/25E net profit forecasts by 12%/8%/6% on the back of lower overheads and higher NOII.
The banking groups, 3QFY23 core net profit of MYR453m took 9MFY23 core net profit to MYR1.32b –which is above expectations at 89%/81% of the full-year forecast and consensus respectively. The variance was largely driven by lower-than-expected overheads and credit costs.
Loan growth moderated QoQ, but was still a robust 7.1% on an annualized basis end-Dec 2022. NIM compressed by 2bps QoQ in 3QFY23 but was nevertheless still higher at 2.13% in 9MFY23 versus 2.07% in 9MFY22. NOII recovered in 3QFY23 (+25% YoY), resulting in 9MFY23 NOII coming in flat YoY. Overall operating profit rose a decent 10.6% YoY in 9MFY23.
The group’s GIL ratio was higher at 1.62% end-Dec 2022 versus 1.52% endSep 2022 and 1.35% end-Dec 2021. Loan loss coverage including regulatory reserves was 104% end-Dec 2022 versus 153% end-Dec 2021. Credit cost was a higher 65bps in 3QFY23 versus 24bps in 2QFY23 but 9MFY23 net credit cost averaged 36bps, and was still within management’s guidance of 35-40bps. The higher credit cost was offset in part by lower allowances for financial investments and a write-back (as opposed to a provision charge) in provisions for commitments and contingencies.
Maybank is maintaining a BUy call on the stock with a target price of MYR5.15 from MYR4.95
