KUALA LUMPUR, Feb 5 — Moody’s Investors Service has affirmed its A3 issuer ratings for CIMB Bank Bhd (CIMB), CIMB Islamic Bank Bhd (CIMB Islamic) and CIMB Investment Bank (CIMB IB).

It has also affirmed CIMB Group Holdings Bhd’s (CIMB Group) Baa1 issuer ratings.

The outlook on all ratings on the issuers above, as applicable, remain stable, it said today.

As for CIMB’s Hong Kong, Singapore, and Labuan branches, Moody’s has shifted its perspective to "no outlook” from "stable” given that there is no senior debt outstanding from those branches.

The affirmation of CIMB’s A3 issuer rating with a stable outlook reflects the bank’s well-established franchise, improved capitalisation and stable core profitability.

"These strengths largely mitigate risks to CIMB’s asset quality and profitability driven by the pandemic-induced economic contraction in key operating markets,” the rating agency said in a statement today.

Moody’s expects successful execution of CIMB’s restructuring to improve its profitability and resilience to operating environment changes.

The group’s ongoing restructuring aims to de-risk the business, simplify the operating structure and improve profitability to deliver sustainable financial results. However, the benefits will take time to materialise because the group faces tough operation conditions in most markets.

CIMB’s A3 issuer rating is two notches above its baa2 baseline credit assessment (BCA), reflecting Moody’s expectation of a very high level of support to the bank from the government of Malaysia (A3 stable), in times of need.

The support expectation is based on CIMB’s significant deposit market share of 12 per cent in Malaysia as at end of September 2020 and the 49.8 per cent indirect government stake in CIMB Group through Khazanah Nasional Bhd (A3) (27.2 per cent), Employees Provident Fund (16 per cent ) and Retirement Fund (Incorporated) (6.6 per cent) as of December 2020.

As for CIMB Group’s Baa1 issuer ratings, Moody’s said it reflects the structural subordination of the group’s holding company creditors relative to CIMB’s creditors. — Bernama