KUALA LUMPUR (May 31): AMMB Holdings Bhd (AmBank) dipped into the red in the fourth quarter ended March 31, 2021 (4QFY21), dragged mainly by one-off exceptional items totalling RM4.77 billion, including the 1Malaysia Development Bhd (1MDB) settlement.
Of the exceptional items recorded in 4QFY21, the biggest was the 1MDB settlement with the Ministry of Finance worth RM2.83 billion, followed by the impairment of goodwill to its conventional and investment banking businesses amounting to RM1.79 billion, and impairment of investment in its associate in real estate investment trust (REIT) of RM147.82 million.
Hence, it posted a net loss of RM4.69 billion, or loss per share of 156 sen, compared to a net profit of RM247.54 million, or earnings per share of 8.23 sen, a year ago.
However, its operating profit before impairment losses and settlement stood at RM604.68 million for 4QFY21, about 23.92% higher than RM487.97 million posted in 4QFY20.
Revenue for the quarter dropped 11.06% to RM1.97 billion from RM2.21 billion a year ago.
The banking group did not declare any dividend for the latest quarter.
The settlement, impairment charges and higher loan provisions resulted in a net loss of RM3.83 billion for FY21 as a whole. It reported a cumulative net profit of RM1.34 billion in FY20. Meanwhile, revenue shrank 9.78% to RM8.41 billion from RM9.32 billion a year before.
In a statement, AmBank group chief executive officer Datuk Sulaiman Mohd Tahir said FY21 has been a challenging year for AmBank.
“We were able to record solid income growth of 7.7% to RM4,552.5 million and profit before provision (PBP) growth of 14.2% to RM2,420.2 million, reflecting the strength of our diverse franchise and our effective cost management strategy.
“Against a challenging economic backdrop, our financial results were materially impacted by one-off exceptional items totalling RM4,767 million and higher impairment charges of RM1,136.7 million due to the lingering effects of the Covid-19 pandemic on the economy. Core PATMI, excluding the exceptional items and related legal and professional expenses, of RM961.6 million was 28.3% lower year on year as a result of increased overlay provisions,” he added.
“It is important to note that the goodwill impairment is a non-cash and non-recurring item. As such, it has no impact to regulatory capital ratios or our future earnings. The REIT Impairment is similar except that it has an immaterial impact to regulatory capital ratios,” he noted.
On prospects, Sulaiman said the Covid-19 pandemic continues to cause various states of disruption to wellbeing and businesses globally and locally. The recent resurgence in the number of Covid-19 cases underscores the highly volatile circumstances.
“Since April 2020, the group has been actively providing financial relief measures to its customers. We are glad to note through our continual engagements, we have made significant progress in graduating financially stable customers to normal repayment streams,” he added.
“As we move into the new fiscal year, we will focus our efforts on strengthening our balance sheet, customer debt rehabilitation, maintaining higher liquidity buffers as well as driving further cost efficiencies.
“While FY21 has brought about some challenges to the group, it has allowed us to move forward without any impediments, to realise our full potential. We have shown resilience and determination and with the past behind us, we can continue our focus on our growth,” he concluded.
At noon break, AmBank’s share price was unchanged at RM2.89, for a market capitalisation of RM9.58 billion. There were 1.14 million shares traded.
