KUALA LUMPUR, Jan 29 — Moody’s Investors Service has affirmed Malayan Banking Bhd’s (Maybank) A3/P-2 deposit and A3 foreign currency senior unsecured debt ratings with a stable outlook.
The international rating agency has also affirmed the bank’s baseline credit assessment (BCA) and adjusted BCA at a3, counterparty risk assessments (CRA) at A2(cr)/P-1(cr), and counterparty risk ratings (CRR) at A2/P-1.
Maybank’s BCA was underpinned by its strong capital, adequate asset quality and profitability, and sound funding and liquidity, it said in a statement today.
“Maybank’s asset quality has mildly weakened in the last three years, with the problem loan ratio increasing to a still-adequate 2.65 per cent at Sept 30, 2018, from 1.86 per cent at end-2015,” it said, adding, the bank’s problem loans ratio is expected to increase modestly this year.
Moody’s said Maybank’s capital buffer is strong and to remain so this year, supported by its dividend reinvestment plan and slow credit growth.
The bank’s tangible common equity (TCE)/RWA stood at a strong 17.1 per cent as at Sept 30, 2018, a level which Moody’s views as positive, given the bank’s mild asset quality challenges, it added.
The rating agency said Maybank’s net income / tangible assets (ROA) has been stable at around one per cent in the last four years, despite a lower net interest margin.
“Funding and liquidity are traditional strengths of Maybank. The bank has a good quality deposit base and good market access, while its liquidity buffer is higher when compared to most domestic peers,” it added.
For 2019, Moody’s expects Maybank to maintain an ROA of around one per cent.
Meanwhile, Moody’s has also affirmed the ratings of subordinated securities issued by the bank, as well as ratings and assessments assigned to Maybank’s Hong Kong and Singapore branches. — Bernama
