AmBank sees limited direct Middle East impact, keeps SMEs and exporters on watch

KUALA LUMPUR - The chief of AmBank Group, Jamie Ling, stated that the conflict in the Middle East is not significantly impacting the bank's borrowers directly, as there have been no defaults reported so far. However, shipment delays and increasing costs are causing some exporters and small and medium enterprises (SMEs) to receive closer attention. Ling highlighted that inconsistent shipments, particularly to Asian exporters, are causing supply chain disruptions.

Ling asserted that the direct market access of borrowers into the Middle East is limited, with no defaults resulting from it. Instead, the bank is monitoring exporters to Asia, as their inventory is building up due to shipment inconsistencies. Some affected borrowers have been moved from Stage 1 to Stage 2 in the bank's credit risk classification, indicating a need for closer engagement and support.

SMEs, especially those in the construction sector, may face increased pressure from higher energy and material costs, particularly under fixed-price contracts. Despite these risks, loan demand among mid-tier corporates and SMEs is expected to remain robust. The bank continues to find these segments attractive due to the potential for strong returns.

Ling emphasized that the bank remains committed to supporting the entrepreneurial segment, driven by business expansion, industrialization, and Malaysia's growing manufacturing sector.