Kuala Lumpur: AMMB Holdings Bhd (AmBank Group) is poised to maintain robust earnings growth quarter-on-quarter, bolstered by significant loan expansion and reduced operating expenses, as indicated by the absence of bonus provisions.

According to BERNAMA News Agency, while the bank’s net interest margin may face slight pressure due to a lower current account and savings account ratio, the overall outlook remains positive.

PIVB highlights that AmBank Group plans to reallocate its capital towards enhancing its business banking and retail small and medium enterprise segments. These segments are expected to yield a higher return on assets (ROA) of 1.57 percent and 3.2 percent, respectively. This strategic move aligns with the bank’s target to increase its ROA to 1.1 percent by the financial year 2029 (FY2029).

PIVB anticipates a higher dividend payout for FY2025, driven by the bank’s ongoing strong earnings growth. The bank is likely to exceed a 40 percent dividend payout in FY2025, building on a 40 percent payout in FY2024. This expectation is supported by a seven percent year-on-year increase in AmBank Group’s nine-month FY2025 net profit and a solid common equity tier one ratio of 14.88 percent.

In the first half of 2025, AmBank Group increased its dividend payout to 10.3 sen, translating to a 34 percent payout, up from the previous 23 percent. Despite these positive developments, PIVB notes that the bank’s management currently has no plans for special dividends, bonus issues, or other corporate actions as it focuses on conserving capital and maintaining its credit rating.

As a result, PIVB maintains a ‘neutral’ call on AmBank Group, with a target price set at RM5.70.