The Edge Daily

AMMB Holdings Bhd expects a lower total loan growth of 8% for its financial year ending March 31, 2007, from 13.5% in FY06 in line with expected weaker loan performance of the banking industry.

AMMB group managing director Cheah Tek Kuang said the slower loan growth was expected due to the higher interest rates and sluggish automotive market.

“We believe that we will achieve at least an 8% growth this year (FY07) in overall loan growth,” he told reporters after AMMB's AGM in Kuala Lumpur on Aug 9.

 

Cheah (pic) said the group's loan portfolio in FY06 totalled RM49 billion. AMMB owns AmBank Bhd and AmIslamic Bank Bhd. It also has a 51% stake each in AmInvestment Bank Bhd and AmMerchant Bank Bhd. He said the growth this year would be driven by the retail banking business comprising personal loans, credit cards, housing loans and car loans. He said hire purchase (HP) loans would also see slower growth of just below 10% in FY07 from 15% or RM9.2 billion in FY06.

“We expect to disburse RM500 million in hire purchase loans every month for this financial year,” Cheah said, adding that AMMB targeted to maintain its HP market share of 23% in FY07.

Cheah also expects lower initial public offerings (IPOs) this year of about 40 such exercises compared with 80 last year.

He said of the 40 IPOs expected this year, AMMB was expected to underwrite between 10 and 12 IPOs.

Meanwhile, AmMerchant Bank announced it, as the joint global coordinator and joint bookrunner, had completed the bookbuilding exercise for the RM900 million ringgit-denominated exchangeable bonds issued by Berjaya Land Bhd.

The bonds, the largest ever ringgit exchangeable bonds in Asia, are exchangeable into existing shares in its associated company, Berjaya Sports Toto Bhd.

Cheah said the response was good with the bonds being oversubscribed by over one time.