Published on 22 October 2012
RAM Ratings has reaffirmed Bank
Pembangunan Malaysia Berhad’s (“BPMB” or “the Bank”) long- and short-term
financial institution ratings at AAA and P1, respectively. At the same time,
the long-term rating of the Bank’s up to RM7 billion Conventional Medium-Term
Notes (“MTN”) and/or Islamic Murabahah MTN Programmes (2006/2036) (in
aggregate, “the MTN programmes”) has also been reaffirmed at AAA. Both
long-term ratings have a stable outlook.
The ratings reflect BPMB as a
strategically important entity to the Federal Government given its
socio-economic role and the track record of exceptionally strong support that
the Bank has received from the Federal Government. As a development financial
institution, BPMB functions as a key conduit for the Federal Government in
developing its mandated infrastructure, high-technology and maritime sectors.
Given the Bank’s role in financing nationally strategic projects, it has
historically derived substantial financial flexibility from the Federal
Government. The Federal Government has demonstrated its support by way of
equity injections, government guarantees for funding and compensations, among
others. About 60% of the Bank’s funding base was government-guaranteed as at
end-March 2012. This underscores our belief that the entirely government-owned
BPMB will receive adequate and timely financial assistance, if required.
In line with its role in
supporting the nation’s social development, BPMB has exposures to large-ticket
infrastructure loans which typically have higher credit risk, as reflected in
its gross impaired-loan ratio of 11.9% as at end-March 2012. Meanwhile, about a
third of its performing loans had restructured and rescheduled terms. However,
the Bank’s strong level of capitalisation, displayed by its tier-1 and overall
risk-weighted capital-adequacy ratios of a respective 33.0% and 34.6% as at
end-March 2012, acts as a buffer against potential credit losses.
Media contact
Evelyn Khoo
(603) 7628 1075
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