1MDB scandal: Malaysian bank AmBank to pay $699 million as settlement

AmBank Group Malaysia, the Malaysian bank that highlighted the 1MDB scandal, has agreed to pay 2.83 billion ringgit ($699 million) to the government as a settlement.

The payment by AMMB Holdings Bhd is for "all outstanding claims and actions in relation to the AmBank Group's involvement in the 1MDB matter," Malaysia's finance ministry said, as quoted by Bloomberg.

The finance ministry's statement did not specify what AMMB's wrongdoing was or what the lender was penalised for, the report said.

AMMB said the settlement would have a "material impact" on its earnings for the year ended March 2021.

"A provision for the Payment Sum will be established in the final quarter of the Company's financial year ending 31 March 2021. While this will have a material impact on the current year’s profitability, there are adequate capital buffers to absorb this settlement without an immediate need to raise additional equity capital," AMMB said in a statement.

According to global investigators, billions of ringgit that passed through accounts at AmBank, allegedly bearing former Malaysian Prime Minister Najib Razak's name, originated at state fund 1MDB.Malaysia's Attorney General cleared Najib of wrongdoing, saying $681 million in his account was a donation from Saudi royal family member and Najib had returned $620 million in a few months.