AMMB Holdings Bhd (AmBank) plans to prioritize lending growth in the mid-tier corporate and small and medium enterprise (SME) sectors while adopting a more selective approach to retail lending, according to group chief executive officer Jamie Ling. Speaking at a briefing following the company’s shareholders’ meeting in Kuala Lumpur on August 20, Ling emphasized the importance of focusing on business banking segments where demand and returns are strongest.

Ling noted that while large corporates, including government-linked companies, remain significant, the bank’s core strategy centers on mid-tier corporates and SMEs. On retail lending, AmBank is narrowing its mortgage lending criteria, citing the segment’s competitiveness and the need to prioritize borrower profiles and property location. Currently, mortgages account for approximately 35% of the bank’s balance sheet.

AmBank reported a 0.8% growth year-to-date in total gross loans, advances, and financing to RM147.8 billion, supported by increases in business and retail banking. Wholesale banking loans were broadly stable. For the quarter ending June 30, 2026 (first quarter of FY27), the bank’s gross loans grew at a two-year compound annual growth rate of 5% and 7% year-on-year, partially driven by a rise in unrated bonds outstanding.

Profit after tax and minority interests surpassed RM2.1 billion, representing a two-year compound annual growth rate of 6% and a 1% year-on-year increase for the quarter. Ling attributed this performance to a strong foundation, highlighting the bank’s focus on returns over market share. Risk provisions of RM275 million had been set aside across retail, SME, and corporate segments, described as a sufficient buffer for current conditions.

Chief financial officer Phuah Shok Cheng reported a moderation in net interest margins to 1.93% during the quarter, down from 1.98% the previous year, reflecting lower asset yields following policy rate cuts. AmBank aims to sustain margins within this range throughout the financial year. The bank’s net profit attributable to shareholders rose 0.8% to RM520.2 million in the quarter, while net income increased 2.8% to RM1.33 billion.

The group’s gross impaired loan ratio edged up slightly to 1.62% from 1.59% at the end of financial year 2026, while loan loss coverage, accounting for regulatory reserves, improved to 102.5% from 100.9%. Customer deposits declined 2% year-to-date to RM144.1 billion, with current account savings account deposits falling 10% to RM46.9 billion.

Business banking loans grew 11% year-on-year to RM54.7 billion, wholesale banking loans increased 19% to RM23.5 billion, and retail banking loans expanded marginally by 0.7% to RM67.7 billion. Business banking profit after tax improved 8% year-on-year to RM200.9 million, supported by higher income and reduced net impairment charges.

AmBank’s share price closed flat at RM7.10, valuing the bank at approximately RM23.5 billion. Ling stated that the group is considering returning some RM2 billion in excess capital to shareholders via special dividends, noting access to capital is currently ample. CIMB Research, however, suggested in a client note that such distributions might not occur within the current financial year but could improve by FY28, coinciding with the Basel 3.1 regulatory transition effective January 1, 2028.

Separately, AmBank expects loan growth to remain in the 7% to 8% range for FY27, driven by sustained demand from mid-tier corporates and SMEs. The group reported gross loans of RM165 billion in the first quarter of FY27, providing a solid platform for ongoing income growth.