KUALA LUMPUR: AMMB Holdings Bhd (Ambank Group) is expected to post a higher dividend payout for the financial year 2024 (FY24) onwards due to the recovery in capital ratios.   

Maybank Investment Bank Bhd (MaybankIB) said the group's Common Equity Tier 1 (CET1) ratios have been restored to a comfortable 13.4 per cent and could potentially be enhanced by another 2.0 per cent-pts when it transitions over to an internal risk-based (IRB) framework. 

With the recovery in capital ratios, the bank expects the group's dividend payout ratio to return to historical levels, which averaged 40 per cent in FY17–FY19. 

"Nevertheless, there is room for further upside, in our opinion, once the shift towards IRB further improves the group's capital ratios," it said. 

Meanwhile, MaybankIB said Ambank Group's loan growth has lagged the industry thus far, and it is likely to end its financial year (March) around the 3.0 per cent mark.

The bank has pencilled in loan growth of 2.8 per cent for FY24 and 3.2 per cent for FY25. 

"Nevertheless, what is positive is that with increased focus on better yielding loans in the commercial and mid-corporate space, we do expect net interest margins (NIMs) to improve in FY25, and we have factored in a 3 basis point increase in the group's FY25 NIM," it said. 

MaybankIB has kept its forecasts following its meeting with management consisting of a net profit growth of 5.7 per cent in FY25 and 26E, respectively, with a prospective return on equity (ROE) of 8.7 per cent. 

The firm maintained a buy on the stock with an unchanged target price of RM5.05.

"We forecast a FY24 dividend yield of 4.9 per cent (40 per cent payout assumption)," it added.