,About 71% or RM1.5bil of AmBank Group’s total goodwill are related to its conventional banking business, while investment banking represents about 20% or RM428mil in goodwill.
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PETALING JAYA: AMMB Holdings Bhd (AmBank Group) is currently undertaking an assessment of goodwill to ascertain the value of impairment that will be reflected in its financial results for the fourth quarter ended March 31.
The banking group noted that this is an annual review exercise and would take into consideration “the recent change in circumstances”.
“This review will be more focused on the goodwill relating to the conventional and investment banking businesses.
“A goodwill write-down is a non-cash item, will have no impact to regulatory capital ratios and does not affect future earnings as it is a non-recurring item, ” it said in a stock exchange filing yesterday.
About 71% or RM1.5bil of AmBank Group’s total goodwill are related to its conventional banking business, while investment banking represents about 20% or RM428mil in goodwill.
Asset and fund management contribute 6% or RM116mil goodwill. Islamic banking business represents 3% or RM54mil.
“Shareholders are advised to give due consideration when dealing in the shares of AMMB since the assessments are still preliminary at this time, ” it said.
In a separate development, AmBank Group announced that it plans to raise over RM800mil via a private placement exercise to strengthen its capitalisation levels that were affected following its RM2.83bil settlement with the Finance Ministry for the group’s involvement in the 1Malaysia Development Bhd scandal.
Up to 300 million new shares are expected to be placed out, representing approximately 9.97% of the group’s existing ordinary share capital, excluding treasury shares.
As the banking group will be recording provisions for the financial year ended March 31 to account for the settlement value, the exercise would have an impact to its capital position.
As at end-2020, the estimated proforma impact of the settlement is a reduction of Common Equity Tier 1 (CET1) from 13.52% to 11.01% as well as a reduction in the Total Capital Ratio from 16.39% to 13.88%.