AMMB Holdings Bhd (AmBank) reported an estimated Day 1 modification loss of RM80 mil in revenue, which led to a RM20 mil loss after tax, for the first quarter of its 2021 financial year.
This was shared at a virtual press conference organised by the bank to share its FY20 full year results.
AmBank reported a full year revenue of RM4.23 bil, up 8% from FY19’s RM3.92 bil, along with a profit of RM1.34 bil, down from FY19’s RM1.5 bil.
It was also shared that the bulk of the modification loss comes from the waiver of interest over the six-month moratorium, which was implemented as part of an economic stimulus package by the government due to the Covid-19 pandemic.
“The majority, at least 90%, of the modification loss comes from the hire purchase segment,” shared Jamie Ling, group CFO of AmBank.
So far, about RM65 bil in net loans have qualified for the six-month moratorium after opt-outs, with the largest takers being the retail segment and small-to-medium enterprises (SMEs). However, this does not include credit cards. It was also shared that this is benefiting about 637,000 customers.
In aiding SMEs, AmBank has also approved about RM800 mil in total, as part of Bank Negara Malaysia’s Special Relief Fund (SRF). This, according to group CEO Sulaiman Tahir, has aided about a thousand SMEs.
Responding to the government noting that it is up to banks to give targeted loan moratoriums, Sulaiman shared that AmBank has been doing so since before Covid-19, and will continue doing so.
“It is not wise for an extended blanket moratorium, and recovery is happening in this phase of the movement control order. As such, we should be focusing on certain segments or individuals,” he said.
At the same time, when asked regarding any merger or consolidation plans for AMMB, Sulaiman shared that he is unsure if now is the right time.
“I am not sure if this is the right time to consider these. The result of mergers or consolidations are usually layoffs, and that is not the flavour of the month,” he said, adding that the focus is on recovering from the Covid-19 situation.
At the end of the trading day, AmBank’s shares were last done at RM3.08, down RM1.60, with 2.8 million shares changing hands. – June 29, 2020