AmBank Earnings To Stay Strong, Dividend Payout May Exceed 40 Pct - PIVB

KUALA LUMPUR, March 27 (Bernama) -- AMMB Holdings Bhd (AmBank Group) is expected to sustain strong earnings growth quarter-on-quarter, driven by robust loan expansion and lower operating expenses following the absence of a bonus provision, Public Investment Bank Bhd (PIVB) said.

However, PIVB sees slight pressure on the bank’s net interest margin, likely weighed down by a lower current account and savings account ratio.

“AmBank Group is looking to reallocate its capital to grow its business banking and retail small and medium enterprise segments, which provide a higher return on assets (ROA) of 1.57 per cent and 3.2 per cent, respectively.  

“This is in line with its target to grow its ROA to 1.1 per cent by the financial year 2029 (FY2029),” it said in a note today.  

PIVB expects a higher dividend payout in FY2025, with AmBank Group on track for stronger earnings growth.

“We believe AmBank Group will likely exceed a 40 per cent dividend payout in FY2025 (FY2024: 40 per cent), underpinned by strong earnings. Its nine-month FY2025 net profit rose seven per cent year-on-year (y-o-y), backed by a solid common equity tier one ratio of 14.88 per cent.

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“In the first half of 2025, the bank raised its dividend payout to 10.3 sen, implying a 34 per cent payout, up from 23 per cent previously,” it noted.

Still, PIVB said management has no plans for special dividends, bonus issues or corporate actions, as it aims to conserve capital and maintain its credit rating.

“Therefore, we maintain a ‘neutral’ call on AmBank Group with a target price of RM5.70,” it added.

-- BERNAMA