Shakeup at the top in AMMB

A major shake-up at the top level of AmBank Group is on the cards as the banking industry braces itself for a tough 2015.

Sources said the banking arm of AMMB Holdings Bhd’s will soon see the departure of its  group managing director Ashok Ramamurthy, managing director for Wholesale Banking Coverage Pushpa Rajadurai and AmInvestment Bank’s managing director/chief executive officer for Wholesale Banking Products Kok Tuck Cheong.

“Some of the changes will likely be announced as early as the end of this week,” a source said.

AMMB had yet to respond to questions posed.

Banking analysts contacted say they were unaware of anything brewing.

“This is quite surprising. The market perception is that the team with Ashok leading it has done a good job so far based on the numbers," says a banking analyst.

“NPL ratios have come down, they have improved the cost efficiency, deposit based has improved and ROE has increased."

Sources say a myriad of issues surrounding the business were behind the upcoming changes.

Most recently, AmInvestment was supposed to lead arrange a RM8.4 billion sukuk bond for 1Malaysia Development Bhd to finance the 3B power project but this has been called off. AmInvestment together with Goldman Sachs also arranged the first bond issue amounting to RM5 billion for 1MDB in 2009.

Ashok (pic) joined the local banking group in 2007 as a representative of Australia and New Zealand Banking Group Limited (“ANZ”), holding the position of chief financial officer in the same year the Australians emerged as a strategic partner and major investor of AMMB.

In October 2008, Ashok was appointed to hold dual roles as deputy group managing director and chief financial officer and succeeded veteran banker Cheah Tek Kuang as group managing director of AMMB when the latter retired on April 1, 2012.

Meanwhile, both Pushpa and Kok have had long careers at AmBank Group. They have been working in the local banking group for over two decades and spent most of their careers in the investment banking arena.

ANZ is the single largest shareholder of AMMB with its 23.75% stake. The entry of ANZ has also boosted AmBank Group’s product base, strengthened its business policies and improved its asset quality.

Aside from ANZ’s stake, the Employees Provident Fund has a 14.5% and AmBank Group chairman – Tan Sri Azman Hashim – has a 12.97% stake.

For its latest six months ended September 30, 2014, AMMB saw its net profit rising 11% year-on-year to RM1.048 billion. In the notes accompanying its results, AMMB noted that the improvement in earnings was also due to higher other operating income of RM392.8 million and lower other operating expenses of RM81.8 million.

As for its financial year ended March 31, 2014, AMMB saw its net profit rising 10% year-on-year to RM1.78 billion.

The stock ended 3 sen down today to close at RM6.57. – The Edge Markets