AmBank expected to lower interest rates

Bank is currently awaiting the findings of its asset and liability committee before deciding on the rates


AMMB Holdings Bhd (AmBank Group) is expected to lower its interest rates this week after the central bank slashed the policy rate by 25 basis points (bps) last week.

AmBank Group business banking MD Christopher Yap said the bank is currently awaiting the findings of its asset and liability committee who is calculating the impact of the rate movement and the appropriate reduction amount.

“We’ve had our first meeting, so at the next meeting, the committee will present to us and then our CEO will make a decision (on the size of the rate cut),” he told reporters at the launch of AmBank Group’s partnership with a charitable organisation in Kuala Lumpur last Friday.

The announcement of AmBank Group’s revised rates will likely be made sometime this week, he added.

Yap said banks will reduce their interest rates for both loans and deposits, which in turn, will boost consumer spending power.

“All banks will be impacted, depending on how much their rates are reduced but it’s something we have to do and we have to find other ways of recovery,” he said.

Bank Negara Malaysia (BNM) last Tuesday slashed the Overnight Policy Rate (OPR) by 25bps to 3%, its first rate cut since July 2016 in light of downside risks to global growth and “signs of tightening of financial conditions” on the home front.

Prior to the cut, BNM’s last move was to hike the OPR by 25bps to 3.25% in January last year, in light of global and domestic economic conditions being ripe for a normalisation of interest rates.

Following last week’s OPR cut, Malayan Banking Bhd (Maybank) said its base rate (BR), base lending rate (BLR) and fixed deposit rates would be adjusted downwards by 20bps effective from May 9.

This brings Maybank’s BR to 3.05% per annum (pa) from 3.25%, while its BLR is at 6.7% pa versus 6.9% previously.

Maybank’s Islamic BR and BLR will also be decreased by 20bps to 3.05% pa from 3.25%, and 6.7% pa from 6.9% respectively.

Bank Islam Malaysia Bhd also announced that it would lower its BR by 26bps to 3.77% pa from 4.03% previously, while its base financing rate is reduced to 6.72% pa from 6.98%, with effect from May 10.

OCBC Bank (M) Bhd and its subsidiary OCBC Al-Amin Bank Bhd also announced last Friday that it was cutting its BR, BLR and base financing rate by 0.25% effective today.

Meanwhile, AmBank Group is aiming to add 600 organisations to its JomPAY biller segment this year, which will reduce payment costs and ease the reconciliation process for both the bank and the organisations using JomPAY.

“Many businesses still use cheques to make payments, so a lot is spent on reconciliation costs. Banks also spend about RM5 per cheque for clearing purposes.

“Therefore, encouraging more businesses to use JomPAY will improve reconciliation of payment and lower costs for banks as well. We are targeting to have 50 new JomPAY billers per month this year,” Yap said.

He said the banking group has amassed 188 JomPAY billers to date since it began using the service two to three years ago.

Moving forward, it sees building maintenance companies, associations and businesses as ideal target markets to acquire more billers, which will in turn enlarge the group’s business.

JomPAY is Malaysia’s national bill payment scheme established and operated by Payments Network Malaysia Sdn Bhd (PayNet), which counts BNM as its single-    largest shareholder.

The service, which now has over 5,013 biller codes, enables bill payments via Internet banking, mobile banking and automated teller machines of 40 banks in Malaysia anywhere and at any time.

AmBank Group last Friday launched its partnership with the Malaysian SLE Association (PSLEM), under which those wishing to make donations to the association can do so via JomPAY.