AMMB Holdings Bhd is confident of maintaining a 10-12 per cent profit growth for the financial year ending March 31, 2014, despite the RM40 million provision it had made as a proactive measure to cover clients' trading losses in three penny stocks.
The trading on the Singapore Stock Exchange was done by its wholly-owned Singapore subsidiary, AmFraser Securities Pte Ltd, which had a gross exposure of RM120 million in Blumont Group Ltd, LionGold Corp Ltd and Asiasons Capital Ltd.
Group managing director Ashok Ramamurthy said the banking group was currently working with its remisiers and clients to recover the losses.
"This exposure is the customers' exposure. We are in the process of working with our customers and remisiers to recover the amount.
"Customers who work with us will be given time to repay the amount to us. Customers who don't work with us will be taken to court," he told reporters after announcing AMMB's second quarter financial results today.
Ashok said the recovery exercise was progressing according to expectation and the RM40 million provision was proactively provided in advance of regulatory requirements.
Trading in Blumont, LionGold and Asiasons were suspended on Oct 4, 2013 after the shares of these companies plunged from a massive gains built earlier this year.
The Singapore Exchange Ltd subsequently declared them "designated
securities" restricting trading in the stocks.
On October 21, 2013 the stock exchange lifted these restrictions.
AMMB's half-year performance recorded a pre-tax profit of RM1.24 billion, up from RM1.15 billion, registered in the same period last year.
Revenue jumped to RM4.78 billion in the six-months period compared with RM4.01 billion recorded previously.
The bank proposed an interim dividend of 7.2 sen, representing a payout of 24 per cent
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