AMMB’s shares suspended on 1MDB settlement


Trading of AMMB Holdings Bhd’s shares were suspended on Monday after the banking group agreed to pay RM2.83 billion to the Malaysian government as settlement on all outstanding claims and actions in relation to its involvement in the 1Malaysia Development Bhd (1MDB) corruption scandal.

The shares were last traded at RM3.16 on Friday last week.

“The board of directors of AMMB wishes to announce that the company has requested for a suspension of the trading of its securities from 9.00 am to 5.00 pm on Monday, March 1, 2021 and Tuesday, March 2, 2021.

“Bursa Malaysia Securities Bhd has approved the request on Monday,” it said in a filing with Bursa Malaysia today, adding that the request was also made pending an announcement from the group.

The settlement amount to be paid to the government is nearly 30 per cent of AMMB’s current market capitalisation of RM9.52 billion.

Maybank Investment Bank Bhd (Maybank IB) said provision for the settlement will push the group into a reported loss of RM1.9 billion for its financial year ended March 31, 2021 (FY21).

“Our FY21E book value falls 14 per cent to RM5.51, while FY21E return of equity (ROE) would be -11 per cent.

“Our FY22E book value falls 14 per cent to RM5.86, but ROE improves to 6.2 per cent from 5.5 per cent. Pending guidance, we have assumed no dividends in FY22 as well,” said analyst Desmond Ch’ng in a research note today.

He recalled that in 2017, a proposed RHB-AMMB merger fell through, allegedly over 1MDB concerns.

“From a positive light, this settlement signals an end to the 1MDB debacle and improves the prospect for future mergers, in our view,” said Ch’ng.

Maybank IB downgraded AMMB Holdings to “hold” call from “buy”, with a revised target price of RM3.40.