KUALA LUMPUR (April 28): AMMB Holdings Bhd (AmBank), which has had to fork out RM2.83 billion as settlement with the Malaysian government earlier this year over its role in the 1Malaysia Development Bhd (1MDB) fiasco, warned today that it will be posting losses for its financial year ended March 31, 2021.
In a bourse filing, the bank said it has incurred a one-off impairment charge of RM1.79 billion in relation to goodwill in its conventional and investment banking businesses for the fourth quarter ended March 31, 2021 (4QFY21). It added that the goodwill impairment is a non-cash item, and will have no impact to its regulatory capital ratios and does not impact future earnings.
AmBank also said it will record a RM148 million impairment on the carrying investment in an associate (REIT Impairment) in its 4QFY21. This impairment is also not a cash item and does not affect future earnings. It will have an immaterial impact on regulatory capital ratios.
These impairments, combined with its 1MDB settlement with the Ministry of Finance (MoF), will result in the banking group posting a net loss for its FY21. “Credit ratings of the AMMB Group are expected to remain unchanged as a result of these impairment charges,” it said.
In February, AmBank announced it had agreed to pay RM2.83 billion to the government as settlement on all outstanding claims and actions in relation to the banking group’s involvement in the 1MDB graft scandal.
Shares in AmBank closed 1.34% or four sen higher at RM3.02 today, valuing it at RM10.01 billion. It saw 3.64 million shares traded.
