KUALA LUMPUR (March 1): Analysts have slashed their target prices for AMMB Holdings Bhd (AmBank) by 14.7% to 30.5%, citing the RM2.83 billion 1MDB settlement as a “negative surprise”. CGS-CIMB analyst Winson Ng noted in a note today that the settlement was a “negative surprise” as “AmBank had not disclosed any discussions between the bank and the regulator previously”. “Factoring in the RM2.83 billion 1MDB settlement, we are now forecasting a net loss of RM2 billion in FY21 versus our net profit forecast of RM829.6 million previously,” he said. Ng also reduced the FY21 dividend per share to zero. “To factor in the negative sentiment arising from the 1MDB settlement, we widen the discount to our dividend discount model (DDM) value from 15% previously (for the credit risk from Covid-19) to 40% (partly for the reputational risk from the 1MDB case). All these lower our DDM-based target price from RM3.97 to RM2.76,” he said.