AmBank mulls targeted loan moratorium

The measure would help stabilise parts of the economy and individuals deeply impacted by the Covid-19 pandemic, says group CEO


AMMB Holdings Bhd is considering extending the six-month moratorium on its personal and hire purchase (HP) loans which will end in September for targeted sectors and selected borrowers.

Extending the measure would help stabilise parts of the economy and individuals deeply impacted by the Covid-19 pandemic, its group CEO Datuk Sulaiman Mohd Tahir (picture) said.

“It is something that we want to look at, particularly for certain criteria and segments that are in dire need of assistance.

“During the Movement Control Order (MCO), the moratorium tremendously helped businesses and individuals, and banks were in a position to help,” he said during a virtual press conference yesterday.

However, the lender believes a blanket extension of the moratorium, which has been imposed to help borrowers affected by the pandemic, is not necessary.

“We see a lot more activities in the post-MCO environment. We don’t think a similar moratorium is required post-MCO as businesses have been picking up and it doesn’t make sense to (apply the moratorium) across the board,” Sulaiman added.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz recently said banks have been given the authority to decide on extending their moratoriums, following borrowers’ pleas for more time to recalibrate their finances.

About RM65 billion or 61% of AmBank (M) Bhd’s total loans in the retail, and small and medium enterprises segments are under the current moratorium ending Sept 30, comprising 637,000 customers.

AmBank group CFO Jamie Ling said the modification losses derived from the waiver of additional interest or profit on deferred HP loans for the moratorium period are estimated to stand at RM80 million in income and RM20 million in profit.

“The bulk of our modification losses is the HP segment at about 90%,” he said, adding that about 60% to 65% of loans in the banking industry are under the moratorium and form a “substantial aspect of non-performing loans”.

For the fourth quarter ended March 31, 2020, AmBank’s net profit fell 46.1% to RM247.54 million from RM459.67 million last year due to a RM194.85 million loan impairment allowance.

Quarterly revenue fell 5.2% to RM2.21 billion from RM2.33 billion a year ago, while net interest income rose 16.5% to RM492.49 million from RM422.76 million a year ago. The group declared a final dividend of 7.3 sen.

For the financial year ended March 31, 2020, the lender’s net profit dropped 10.9% to RM1.34 billion from RM1.51 billion previously due to higher net provisions. Revenue improved 2.2% to RM9.32 billion from RM9.12 billion last year.