KUALA LUMPUR: AMMB’s core net profit for the financial year ended March 31, 2018 was below CIMB Equities Research’s expectations, accounting for 94% of its forecast due to lower-than-expected topline growth.“However, the FY18 net profit was largely in line with market expectations at 96% of Bloomberg consensus’ estimates,” it said on Friday.The research house said the full-year net dividend per share of 15 sen was also below its projected 18 sen.Commenting on the financial results, CIMB Research said AMMB booked in one-off mutual separation scheme (MSS) costs of RM146mil in the fourth quarter. This contributed to the 24.5% on-year drop in its reported net profit for that quarter.Excluding the MSS costs, core net profit for 4QFY18 would have increased by 8.5% on-year, mainly driven by a strong 17% on-year increase in Islamic banking income and a net write-back of RM29mil in loan loss provisioning.The reported FY18 net profit fell by 14.5%, partly due to the one-off MSS costs. As such, our DDM-based target price remains unchanged at RM3.50.“Despite the above-industry loan growth, we retain our Hold call on AMMB due to the expected upturn in credit cost cycle starting from FY19F. The upside/downside risks to our call are a pick-up/slowdown in loan and fee income growth. We prefer RHB Bank for exposure to the Malaysian banking sector,” it said.

Source: The Star June 01, 2018 02:15 UTC