AMMB's trade loan exposure minimal at 4.7pct, says CIMB Securities

New Straits Times

16-05-2025

KUALA LUMPUR: AMMB Holdings Bhd's loans tied directly to the trade segment account for only 4.7 per cent of its overall loan portfolio, reflecting minimal exposure.
According to CIMB Securities, this aligns with trends seen across other banks and supports its earlier assessment that the industry's direct exposure to the trade segment is not significant.
"We believe the market's main concern lies with the second-order knock-on effects, which remain difficult for most banks to quantify at this stage," it said.
However, CIMB Securities said AMMB's exposure to direct US trade-related sectors amounts to RM6.4 billion, representing 4.7 per cent of its total loans and involving 143 customers.
"The total loan commitment granted or approved is RM9.3 billion for these trade-related loans of RM6.4 billion," it added.
AMMB further divided the 143 customers with a total exposure of RM6.4 billion into three categories based on revenue impact.
These include RM140 million with high direct impact (over 50 per cent of revenue affected), around RM680 million with moderate impact (25 to 50 per cent affected), and the remaining RM6.4 billion with low impact (less than 25 per cent affected).
"Most of these 143 customers are high-grade customers with typically strong balance sheets.
"Outstanding loans related to the electrical and electronics segment total RM935 million (0.7 per cent of total loans), out of RM1.1 billion loans approved, involving 95 customers.
"Loans to the furniture segment amount to RM600 million (0.4 per cent of total loans), involving 220 customers," it added.
CIMB Securities maintains a neutral stance and a 'Hold' rating on AMMB, keeping its target price steady at RM5.70 for financial year 2026 (FY26).
This valuation is based on an expected return on equity of 8.6 per cent for calendar year 2026 and a fair price-to-book ratio of 0.9 times.