AmBank turns red in Q4, not thanks to 1MDB settlement and write-downs

KUALA LUMPUR (May 31): AMMB Holdings Bhd (AmBank) dipped into the red in the fourth quarter ended March 31, 2021 (4QFY21), driven mainly by one-time exceptional items totaling RM 4.77 billion, including the 1Malaysia Development Bhd (1MDB).

Among the exceptional items recorded in 4QFY21, the most important was the settlement of 1MDB with the Ministry of Finance worth RM2.83 billion, followed by the impairment of goodwill from its conventional banking and investment activities. in the amount of RM 1.79 billion and the depreciation of investments in his partner in a real estate investment trust (REIT) of RM 147.82 million.

Therefore, it recorded a net loss of RM 4.69 billion, or loss per share of 156 sen, against net profit of RM 247.54 million, or earnings per share of 8.23 ​​sen, he a year ago.

However, its operating profit before impairment and settlement amounted to RM604.68 million for 4QFY21, approximately 23.92% more than RM 487.97 million for 4QFY20.

Revenue for the quarter fell 11.06% to RM 1.97 billion, from RM 2.21 billion a year ago.

The banking group did not declare any dividends for the last quarter.

The higher settlement, depreciation charges and loan provisions resulted in a net loss of RM 3.83 billion for the full year 21. He reported a cumulative net profit of RM 1.34 billion. in FY20. Meanwhile, revenue fell 9.78% to RM 8.41 billion, from RM 9.32 billion a year earlier.

In a statement, AmBank Group CEO Datuk Sulaiman Mohd Tahir said FY21 has been a difficult year for AmBank.

“We were able to record solid revenue growth of 7.7% to RM 4,552.5 million and earnings before provision (PBP) growth of 14.2% to RM 2,420.2 million, reflecting the strength our diversified franchise and our effective cost management strategy.

“In a difficult economic environment, our financial results were significantly impacted by one-off exceptional items totaling RM4,767 million and higher depreciation charges of RM 1,136.7 million due to the lingering effects of the Covid pandemic -19 on the economy. Core PATMI excluding exceptional items and related legal and professional fees of RM 961.6 million is down 28.3% year-on-year due to increased provisions recovery, ”he added.

“It is important to note that goodwill impairment is a non-cash and one-time item. As such, it has no impact on regulatory capital ratios or our future earnings. The REIT’s impairment is similar except that it has an insignificant impact on regulatory capital ratios, ”he noted.

Regarding the outlook, Sulaiman said the Covid-19 pandemic continues to disrupt well-being and businesses globally and locally. The recent upsurge in the number of Covid-19 cases underscores the extremely volatile circumstances.

“Since April 2020, the group has actively provided financial assistance to its customers. We are pleased to see that through our continued commitments we have made significant progress in moving financially stable clients to normal reimbursement streams, ”he added.

“As we enter the new fiscal year, we will focus our efforts on strengthening our balance sheet, rehabilitating customer debt, maintaining higher liquidity cushions and pursuing profitability.

“Although FY21 brought some challenges to the group, it allowed us to move forward without any obstacle, to realize our full potential. We have shown resilience and determination and with the past behind us, we can continue to focus on our growth, ”he concluded.

As of noon, AmBank’s share price was unchanged at RM 2.89, with a market cap of RM 9.58 billion. There were 1.14 million shares traded.

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