Published on 06 November 2014
RAM Ratings has reaffirmed Alliance Bank
Malaysia Berhad’s (or the Group) A1/Stable/P1 financial institution
ratings as well the A2/Stable rating of the MTN issued under its RM1.5
billion Subordinated MTN Issuance Programme (2011/2026). The 1-notch
differential between Alliance Bank’s long-term financial institution
rating and issue rating reflects the subordination of the debt facility
to the Group’s senior unsecured obligations.
Alliance Bank is the smallest banking group in
Malaysia, but remains well positioned in the SME and consumer segments.
On the other hand, its Islamic and investment-banking franchises still
lag that of larger universal-banking groups. Overall, the Group’s asset
quality has stayed healthy. Its gross impaired-loan (GIL) ratio had
improved to 1.4% as at end-June 2014 while its credit-cost ratio was
commendably low at 10 basis points (annualised).
On the funding front, Alliance Bank boasts a large
proportion of low-cost current- and savings-account deposits (35%),
mainly contributed by its large pool of SME customers. While the Group’s
loans-to-deposits ratio had inched up to 83% as at end-June 2014, it is
still deemed comfortable. The Group has maintained a stable profit
performance, as evidenced by its consistent bottom-line growth and
healthy profitability indicators. As at end-June 2014, the Group's
common-equity tier-1 ratio stood at a sound 10%.
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