RAM Ratings reaffirms Bank of Tokyo-Mitsubishi UFJ Malaysia's AA1/Stable financial institution rating

Published on 20 August 2015

RAM Ratings has reaffirmed the AA1/Stable/P1 financial institution ratings of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad (BTMU Malaysia or the Bank). Concurrently, we have also reaffirmed the AAA(bg)/Stable rating of the securities issued under the Bank’s USD500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme (the Programme).
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 over the Sukuk Wakalah issued under the Programme, which enhances the risk profile of the securities beyond BTMU Malaysia’s stand-alone credit profile.
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 reflect its robust capitalisation, superior loan quality and stable income-generating capacity. In addition, the ratings consider the Bank’s relatively smaller size and narrow business scope, vis-à-vis the larger universal banking groups in Malaysia. BTMU Malaysia’s ratings benefit from a strong likelihood of support from its parent.
The Bank’s loans expanded 50% in FY Dec 2014, 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 to manage credit risks on its large exposures. In line with plans to broaden its customer base, a larger proportion of the Bank’s loans are extended to non-Japanese corporates. The Bank’s loan-quality indicators have stayed superior, with a gross impaired-loan ratio of just 0.04% as at end-March 2015. At the same time, the Bank recorded a robust common-equity tier-1 capital ratio of 17.2%.

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