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AmBank To Sell NPLs For RM330 Mln    
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Source: Bernama.com

KUALA LUMPUR, Sept 26 (Bernama) -- AMMB Holdings Bhd's subsidiary, AmBank (M) Bhd, will sell RM330 million of non-performing loans (NPLs) to investment bank Lehman Brothers.

"They are all property loans. With better liquidity in the property market, we are able to dispose of quite of number of the loans that we have from MBF Finance which we acquired in 2002," AMMB's director of group corporate services, Amarjeet Kaur, said today. She said AMMB hoped to complete the NPLs sale by this month.

The disposal followed an earlier sale of RM110 million of NPLs to GE Capital, as part of its plan to reduce the bad loans to four percent of outstanding loans by March 31, 2008 from 5.7 percent at end-June. She was speaking told reporters after the annual general meeting and extraordinary general meeting of AMMB and its investment unit, AmInvestment Group Bhd (AIGB), here today.

She said the sales would help AmBank reduce its NPL ratio to be in line with the industry average and eliminate the source of the drag on the group's net interest margin and profitability. "We went through an auction process with four other banks. These investment banks see the Malaysian property market on a uptrend," Amarjeet said.

She said at the moment, AMMB would not sell more bad loans after the sales to Lehman Brhehas, adding that the banking unit still had about RM2.7 billion in loans classified as non-performing. She said AIGB would be de-listed by year-end following its shareholders' acceptance of the AMMB privatisation offer of RM3.70 per share.

Meanwhile, group managing director, Cheah Tek Kuang, said retail business would continue to be AMMB's core business. "At the same time, we are also looking to grow in the foreign exchange and small and medium enterprise businesses," he said.

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