Published on 07 Nov 2017.
RAM Ratings has reaffirmed the AAA(bg)/Stable rating of the securities issued under Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad’s (BTMU Malaysia or the Bank) USD500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme (the Programme). Concurrently, we have also reaffirmed the AA1/Stable/P1 financial institution ratings of the Bank.
BTMU Malaysia is wholly owned by The Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU, rated AAA/Stable/P1 by RAM). The enhanced issue rating reflects the irrevocable and unconditional guarantee extended by BTMU on the Sukuk Wakalah issued under the Programme.
The Bank and its parent constitute part of the larger Mitsubishi UFJ Financial Group (MUFG) - one of the world’s largest banking groups and also Japan’s leading banking group. BTMU Malaysia’s ratings benefit from a strong likelihood of support from its parent. The ratings also reflect its robust capitalisation, superior loan quality and stable income-generating capacity.
BTMU Malaysia’s loan base expanded 9% in the 15-month fiscal period ended 31 March 2017; the Bank recently changed its financial year-end from 31 December to 31 March. The expansion was supported by placements from its parent under a cash-collateral scheme. Besides providing stable funding for loan expansion, such collateral had also helped the Bank manage the credit risks on its large exposures. BTMU Malaysia’s loan portfolio is of superior quality as a result of its focus on the Malaysian-domiciled entities owned by established Japanese conglomerates, MNCs and highly rated domestic names. As at end-March 2017, the Bank recorded a robust common-equity tier-1 capital ratio of 16.7%. There is however, some concentration in its loan book in terms of both borrowers and sectors, even though some improvement can be observed. As at end-March 2017, its 3 largest loans and the “finance, insurance, real estate and business services” sector accounted for a respective 30% and 49% of its lending.
Analytical contact
Chan Yin Huei
(603) 7628 1180
yinhuei@ram.com.my
Media contact
Padthma Subbiah
(603) 7628 1162
padthma@ram.com.my
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.