ANZ warns of profit hit from AmBank exposure to 1MDB scandal

[BENGALURU] Australia and New Zealand Banking Group said on Friday its first-half cash profit would take an A$817 million (S$841.8 million) hit largely from losses on its investment in a Malaysian bank that was involved in the 1MDB scandal.

ANZ, the country's fourth-largest lender, said it would take a further impairment charge of A$135 million on its 24 per cent stake in AMMB Holdings Bhd, having warned of a A$212 million write down in March.

AmBank said earlier this year it would pay the Malaysian government US$700 million to settle claims in relation to its role in the scandal in which US$4.5 billion was allegedly stolen from 1Malaysia Development Berhad (1MDB), a state fund set up by former prime minister Najib Razak.

The Australian bank also announced a A$251 million write-down on its share investment business, A$108 million for further customer refunds and a smaller amount toward restructuring.

REUTERS