AMMB Holdings Bhd has revealed that loans directly tied to the trade segment constitute a mere 4.7 percent of its total loan portfolio, reflecting minimal exposure. This assessment is aligned with similar trends observed across other banking institutions, according to CIMB Securities.
CIMB Securities noted that while the direct exposure to the trade segment remains low, the market’s primary concern lies with the potential second-order knock-on effects, which most banks are finding challenging to quantify at present.
The financial group highlighted that AMMB’s exposure to sectors directly related to US trade amounts to RM6.4 billion, equating to 4.7 percent of its overall loans and involving 143 customers. The total loan commitment approved for these trade-related loans stands at RM9.3 billion.
AMMB has categorised the 143 customers with a cumulative exposure of RM6.4 billion into three groups based on the level of revenue impact. The first group, with a high direct impact where more than 50 percent of revenue is affected, represents RM140 million. The second group, experiencing a moderate impact with 25 to 50 percent of revenue affected, accounts for approximately RM680 million. The remaining amount, representing RM6.4 billion, is attributed to low-impact customers, where less than 25 percent of revenue is affected.
CIMB Securities pointed out that most of these customers are classified as high-grade, typically possessing robust balance sheets.
The report also indicated that loans related to the electrical and electronics sector total RM935 million, representing 0.7 percent of AMMB’s total loans, with RM1.1 billion in approved loans spread across 95 customers. In the furniture segment, loans amount to RM600 million, making up 0.4 percent of total loans, involving 220 customers.
Maintaining a neutral stance, CIMB Securities reiterated its ‘Hold’ rating on AMMB and kept the target price unchanged at RM5.70 for the financial year 2026. This valuation is based on an anticipated return on equity of 8.6 percent for the calendar year 2026 and a fair price-to-book ratio of 0.9 times.
-Business Times
