Published on 18 June 2015
RAM
Ratings has reaffirmed the AAA/Stable/P1 financial institution ratings of HSBC
Amanah Malaysia Berhad (the Bank), as well as the AAA/Stable rating of the
Bank’s RM3 billion Multi-Currency Sukuk Programme (2012/2032). The ratings are
premised on the Bank’s strategic role as the Islamic banking arm of HSBC Bank
Malaysia Berhad (rated AAA/Stable/P1 by RAM), as well as the integration of its
operating model with that of its parent.
As the
largest locally incorporated foreign Islamic bank in Malaysia, HSBC Amanah has
an established domestic franchise under the Amanah
brand. Malaysia is also one of the 2 global hubs for HSBC Holdings plc’s Amanah network. Given the
Bank’s strategic importance to both HSBC Bank and HSBC Holdings, we believe
that parental support will be readily extended if needed.
HSBC
Amanah’s gross financing expanded 14% in fiscal 2014, mainly supported by the
growth of its working-capital and mortgage financing. On the back of a larger
financing base, the Bank’s gross impaired-financing ratio had improved to 1.5%
as at end-December 2014. However, the Bank’s credit-cost ratio remained high at
0.7% due to its still-substantial exposure to unsecured financing (21% of its
total financing).
Due to
a marginal contraction in customer deposits and its strong financing growth,
HSBC Amanah’s financing-to-deposits ratio had climbed up to 98% as at
end-December 2014 (end-December 2013: 84%). However, we anticipate ready
funding support from HSBC Malaysia if required. At the same time, the Bank’s
capitalisation remained strong, with common-equity tier-1 capital and total
capital ratios of 11.8% and 15.1%, respectively.
Media contact
Liang Huey Jean
(03) 7628 1124
jean@ram.com.my
Liang Huey Jean
(03) 7628 1124
jean@ram.com.my
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