RAM Ratings reaffirms Standard Chartered Malaysia's AAA/P1 ratings

Published on 24 August 2011
RAM Ratings has reaffirmed Standard Chartered Bank Malaysia Berhad’s (Standard Chartered or the Bank) AAA/P1 financial institution ratings. Concurrently, the AAA rating of the Bank’s RM186.2 million Islamic Payment Notes (2004/2011) and AA1 rating of its RM500 million Subordinated Bonds (2007/2017) have also been reaffirmed. All the long-term ratings have a stable outlook.



Standard Chartered is a wholly owned subsidiary of global banking group Standard Chartered PLC (the Group). The ratings reflect the Bank’s healthy asset quality, as well as its established retail and international trade franchise. In terms of financial flexibility, RAM Ratings opines that shareholder support will be forthcoming should the need arise. In addition, Standard Chartered benefits from the Group’s global distribution network and expertise.

The Bank recorded a commendable low gross impaired-loan ratio of 1.5% as at end-March 2011. Meanwhile, its credit-cost ratio of 0.8% in FY Dec 2010 is higher than average, although partly due to Standard Chartered’s prudent provisioning policies. Against the backdrop of a lower deposit base (a result of keen competition) and expanding loan book, the Bank’s loans-to-deposits ratio had been elevated to 85.8% by end-March 2011 (end-December 2009: 70%).

Having recovered from the challenging operating environment in fiscal 2009 and spurred by a 22% loan growth as well as stronger non-interest revenue, Standard Chartered’s pre-tax profit grew 43% to RM572 million in FY Dec 2010. The Bank’s latest reported tier-1 and overall risk-weighted capital-adequacy ratios (RWCARs) came up to a respective 9.7% and 13.9% as at end-March 2011. While its tier-1 RWCAR is low relative to industry benchmarks, RAM Ratings views this as respectable, given the Bank’s asset quality.

Media contact
Joanne Kek
(603) 7628 1163
joanne@ram.com.my