KUALA LUMPUR, Dec 11 — Moody’s Investors Service today affirmed the long-term foreign currency deposit ratings of HSBC Bank Malaysia Bhd (HSBC Malaysia) at A2 and Standard Chartered Bank Malaysia Bhd (StanChart Malaysia) at Baa1.
The rating agency said it also affirmed the baa1 Baseline Credit Assessments (BCA) and maintained the stable outlooks on both banks’ ratings, where applicable.
It also affirmed the a2 adjusted BCA of HSBC Malaysia.
“The affirmation of HSBC Malaysia’s and StanChart Malaysia’s ratings and BCAs reflects their strong capitalisation, robust funding and liquidity metrics, and Moody’s expectation that their asset quality will continue to improve over the next 12 to 18 months,” it said in a statement.
As of the end of September 2023, it noted the nonperforming loan (NPL) ratios of HSBC Malaysia and StanChart Malaysia decreased to 4.3 per cent and 3.3 per cent of gross loans from 5.9 per cent and 3.7 per cent, respectively, from a year earlier, partly driven by higher write-offs.
“The two banks’ NPL ratios are higher than the domestic Malaysian peers that Moody’s rates because of their conservative loan classification.
“Moody’s expects the NPL ratios to decline further because loan repayments from borrowers who are still under repayment assistance will remain prompt,” it added. — Bernama
