AMMB Holdings, the Malaysian bank widely known as AmBank, has agreed a RM2.83 billion ($699 million) settlement with the government of Malaysia.
It moves a step closer to putting the 1MDB scandal in the country’s rear-view mirror, but also blights the bank’s earnings, surprising its investors – and delivering a knock-on hit to shareholder ANZ.
AmBank was one of the Malaysian institutions most closely linked to the 1MDB scandal. It held prime minister Najib Razak’s bank accounts, including one through which Najib received a $681 million payment from the Saudi royal family that was at the heart of the drama.
The fine – the rationale of which the ministry of finance does not spell out – came as something of a surprise to the market, given that AMMB has already been fined once. It received a RM53.7 million penalty from Bank Negara Malaysia, the central bank, in 2015, over some unspecified matters of non-compliance related to 1MDB.
AmBank had positioned itself as something of a victim of circumstances, acting under pressure from the prime minister. It is believed to have raised concerns about the accounts with the central bank – something that the then-governor, Zeti Akhtar Aziz, is likely to shed light on when called to give evidence in the continuing trials of Najib.
