KUALA LUMPUR (Sept 19): AMMB Holdings Bhd group chief executive officer (CEO) Datuk Sulaiman Mohd Tahir recalls the 1997/98 Asian Financial Crisis (AFC), when Malaysian banks were truly put to the acid test, as interest rates were high and borrowers struggled to service their loans even as lenders pushed them to pay up.

Today, the Malaysian banking industry is faced with yet another crisis — the Covid-19 pandemic.

However, Sulaiman points out that the big difference now, compared to the AFC,  is that interest rates have dropped significantly with Bank Negara Malaysia (BNM) cutting the overnight policy rate (OPR) by 125 basis points (bps) so far this year to a record low of 1.75%, and banks have given borrowers a reprieve by offering an automatic six-month loan moratorium to individuals and small and medium enterprises (SMEs).

These moves have allowed both banks and borrowers to better manage their financials even as Malaysians grapple with a new normal of life and work.

“The abnormal becomes the new norm and you just have to adjust. Yes, although lower interest rates affect our margins as a whole, these [and the moratorium] help in managing the non-performing loan (NPL) position much better than [in previous crises]. And that is a good thing,” Sulaiman, 57, tells The Edge in its first one-on-one interview with a bank CEO since the onslaught of the coronavirus.

During the two-hour conversation, Sulaiman speaks animatedly about what AMMB is doing to contain the fallout from Covid-19 and the way forward for the country’s sixth largest of eight local banking groups in terms of assets.

In our accompanying stories, we speak to Sulaiman on the lawsuit by former prime minister Datuk Seri Najib Razak against AmBank Islamic Bhd and its former relationship manager Joanna Yu Ging Ping over management of accounts under his name that were used to divert funds from SRC International Sdn Bhd, a former unit of 1Malaysia Development Bhd (1MDB).

We also speak to Sulaiman on AmBank’s plans for a digital bank licence, which is one of the thrusts of its Focus 8 strategy.

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