AmBank Group to pay RM53.7mil penalty to Bank Negara

KUALA LUMPUR: Bank Negara has imposed a penalty of RM53.7mil on AMMB Holdings Bhd (AmBank Group) with respect to non-compliance with certain regulations by AmBank (M) Bhd and AmBank Islamic Bhd.

In a filing with Bursa Malaysia on Monday, AmBank Group said it had agreed to pay the penalty pertaining to action pursuant to section 234 of the Financial Services Act 2013 and section 245 of the Islamic Financial Services Act 2013.

Both sections refer to administrative actions that banks can take for a breach in the respective Acts.

AmBank Group, which did not reveal the details of the non-compliance, said it had begun its own review and had been co-operating with the central bank with regard to this matter, including providing information to the latter.

It said the review had led to the strengthening of its governance structure and was ongoing.

“AmBank Group takes its compliance responsibility very seriously and has agreed with Bank Negara a four-year programme of work towards achieving market best practices,” it said.

“Moving forward, we have agreed with Bank Negara that we will set aside an average of RM25mil per annum for four years for investment in systems, infrastructure and training. This series of measures will further enhance the robustness of our processes, reporting, improve our governance structure as well as safeguard against such circumstances recurring in the future and ensure that AmBank Group is well placed for future growth.”

The company said the penalty had no material impact on AmBank Group’s earnings for the 2016 financial year.

On Monday, Datuk Sulaiman Mohd Tahir took over as group chief executive officer of AmBank Group and CEO of its commercial banking arm AmBank (M) Bhd.

AMMB Holdings shares closed unchanged at RM4.59 on Monday, with 3.122 million shares traded.