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AmBank to focus on SME & selective retail segment in FY24, says CEO Sulaiman Mohd Tahir

KUALA LUMPUR: AMMB Holdings Bhd's (AmBank Group) says its key areas of growth in the upcoming financial year 2024 (FY24) will be focused on the small and medium enterprises (SME) and selective retail segment.

AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir said the bank believed that there were still significant growth opportunities within the SME space.

"Our focus area for FY24 remains to be the SME space and of course, selective retail space. 

"I think there's still opportunity to grow particularly the SMEs. But ultimately, our focus will be to strengthen this particular segment next year, where will focus on the deposit category," he said at a media briefing today. 

Sulaiman added that one key aspect of the bank's strategy was to strike a balance between growth and maintaining a stable deposit base.  

AmBank also aims to concentrate on the SME deposits, as they offer a lower rate of runoff and contribute to overall stability. 

Sulaiman acknowledged the potential for growth in trade and infrastructure sectors in Malaysia, driven by government spending on infrastructure development.  

He said the bank intendef to capitalise on these opportunities and expand its presence in these areas. 

He noted that compared to the current financial year, where AmBank Group experienced nine per cent growth, the bank anticipated a more conservative growth rate of around one per cent in FY24, as industrial sectors were projected to grow between four and a half to five per cent.  

However, Sulaiman said the bank remained optimistic that this growth could reach six per cent, largely driven by personal consumption spending. 

AmBank Group expects the situation in the second half of 2023 (2H23) to continue to be challenging, mainly driven by external factors as major economies have to deal with the impact from steep interest rate hikes that had taken place since last year. 

The bank added that should the US debt ceiling situation remained unresolved by June 2023, it would add more uncertainty in the financial market and affect the global outlook in the 2H23. 

On monetary policy, Sulaiman said interest rate hikes in Malaysia had been gradual compared to the other major central banks which had been much faster and steeper.  

However, he noted that there was a case now that the monetary policy normalisation in Malaysia might have ended given the pessimism in the global growth outlook.  

"However, we do think that future rate adjustments cannot be fully discounted just yet, depending on how economy and core inflation indicators evolve during the months to come.  

"Our assessments based on current information flow suggest that overnight policy rate (OPR) at three per cent is adequate in balancing between supporting economic growth and anchoring future inflation expectations," he said. 

For the fourth quarter ended March 31, 2023 (4Q23), AmBank Group net profit rose 9.23 per cent to RM427.91 million from RM391.75 million a year ago, on the back of higher revenue. 

Quarterly revenue was up 3.29 per cent to RM1.16 billion from RM1.12 billion previously, its filing to Bursa Malaysia showed. 

The bank declared a final dividend of 12.3 sen per share for the financial year ended March 31, 2022 (FY2023), with a payment date to be determined and announced later. 

For the full year, AmBank's net profit rose 16 per cent to RM1.74 billion from RM1.5 billion a year ago, while revenue increased to RM4.74 billion from RM4.67 billion previously. 

Sulaiman said capitalising on the strong recovery of the Malaysian economy post-pandemic, the bank's strong financial performance, marked by a 15.5 per cent profit after taxation and minority interests (PATMI) growth and return on equity (ROE) of 10 per cent, helped end its FY23 on a high note and put it on sure financial footing to take on the next 12 months.  

As a result, he said the bank had delivered a much-improved dividend payout ratio of 35 per cent for FY23. 

AmBank Group is at the final stretch of its FY21-FY24 Focus 8 strategy journey and remains committed to its successful completion.

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