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RAM Ratings reaffirms Standard Chartered Saadiq's AAA/Stable/P1 ratings

IM Press Release
By IM Press Release
7 years ago
RAM Ratings reaffirms Standard Chartered Saadiq's AAA/Stable/P1 ratings

Ard, Islam, Mal


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  1. IB ​ ​Press​ ​Release​ ​Service Published​ ​on:​​ ​IslamicBanker.com​ ​Publications:​ ​https://www.islamicmarkets.com/publications RAM​ ​Ratings​ ​reaffirms​ ​Standard​ ​Chartered​ ​Saadiq's AAA/Stable/P1​ ​ratings 15​ ​November​ ​2017 RAM​ ​Ratings​ ​has​ ​reaffirmed​ ​Standard​ ​Chartered​ ​Saadiq​ ​Berhad's​ ​(the​ ​Bank)​ ​AAA/Stable/P1 financial​ ​institution​ ​ratings.​ ​The​ ​ratings​ ​are​ ​premised​ ​on​ ​Saadiq's​ ​strategic​ ​role​ ​as​ ​the​ ​Islamic banking​ ​arm​ ​of​ ​Standard​ ​Chartered​ ​Bank​ ​Malaysia​ ​Berhad​ ​(Standard​ ​Chartered​ ​Malaysia​ ​or​ ​the Group,​ ​rated​ ​AAA/Stable/P1​ ​by​ ​RAM);​ ​the​ ​Bank​ ​leverages​ ​its​ ​parent's​ ​branch​ ​network,​ ​technical expertise,​ ​and​ ​risk-management​ ​systems.​ ​We​ ​expect​ ​ready​ ​capital​ ​and​ ​funding​ ​support​ ​from Standard​ ​Chartered​ ​Malaysia,​ ​if​ ​required. Saadiq​ ​remains​ ​among​ ​the​ ​smaller​ ​Islamic​ ​banks​ ​in​ ​Malaysia,​ ​with​ ​less​ ​than​ ​2%​ ​of​ ​this segment's​ ​assets​ ​as​ ​at​ ​end-June​ ​2017.​ ​Following​ ​the​ ​Group's​ ​earlier​ ​strategy​ ​of​ ​de-risking​ ​its unsecured​ ​portfolio,​ ​Saadiq's​ ​financing​ ​portfolio​ ​has​ ​been​ ​largely​ ​tilted​ ​towards​ ​secured financing​ ​in​ ​recent​ ​years.​ ​As​ ​at​ ​end-June​ ​2017,​ ​residential​ ​and​ ​non-residential​ ​property financing​ ​comprised​ ​61%​ ​of​ ​the​ ​Bank's​ ​financing​ ​portfolio​ ​while​ ​personal​ ​financing​ ​facilities​ ​only accounted​ ​for​ ​4%​ ​(end-December​ ​2012:​ ​20%​ ​and​ ​34%). While​ ​there​ ​has​ ​been​ ​a​ ​gradual​ ​improvement​ ​in​ ​Saadiq's​ ​asset-quality​ ​indicators​ ​in​ ​the​ ​last​ ​few years,​ ​the​ ​seasoning​ ​effects​ ​from​ ​its​ ​property​ ​financing​ ​portfolio​ ​following​ ​its​ ​earlier​ ​rapid​ ​growth had​ ​weakened​ ​its​ ​gross​ ​impaired-financing​ ​(GIF)​ ​ratio​ ​to​ ​0.8%​ ​as​ ​at​ ​end-June​ ​2017 (end-December​ ​2015:​ ​0.5%),​ ​albeit​ ​still​ ​better​ ​than​ ​the​ ​banking​ ​industry's​ ​1.6%.​ ​Although​ ​asset quality​ ​could​ ​remain​ ​pressured​ ​by​ ​the​ ​challenging​ ​operating​ ​environment,​ ​the​ ​Bank's​ ​GIF coverage​ ​ratio​ ​of​ ​198%​ ​as​ ​at​ ​the​ ​same​ ​date​ ​provides​ ​a​ ​strong​ ​buffer. Despite​ ​an​ ​uptick​ ​in​ ​impairment​ ​charges,​ ​Saadiq's​ ​pre-tax​ ​profit​ ​trended​ ​upwards​ ​to​ ​RM42.8 million​ ​in​ ​fiscal​ ​2016​ ​(fiscal​ ​2015:​ ​RM20.3​ ​million)​ ​as​ ​the​ ​Bank's​ ​funding​ ​costs​ ​decreased.​ ​The Bank's​ ​funding​ ​and​ ​liquidity​ ​profile​ ​remains​ ​supported​ ​by​ ​its​ ​parent​ ​through​ ​interbank​ ​funding and​ ​profit-sharing​ ​investment​ ​account.​ ​Saadiq​ ​is​ ​strongly​ ​capitalised,​ ​with​ ​respective common-equity​ ​tier-1​ ​and​ ​total​ ​capital​ ​ratios​ ​of​ ​18.1%​ ​and​ ​21.2%​ ​as​ ​at​ ​end-June​ ​2017. Organisation​ ​Name: News​ ​Type: RAM​ ​Rating​ ​Services​ ​Berhad RATING​ ​ANNOUNCEMENT
  2. IB ​ ​Press​ ​Release​ ​Service Published​ ​on:​​ ​IslamicBanker.com​ ​Publications:​ ​https://www.islamicmarkets.com/publications Source: BNM​ ​Announcements Media​ ​Contact Padthma​ ​Subbiah (603)​ ​7628​ ​1162 padthma@ram.com.my Disclaimer: The​ ​credit​ ​rating​ ​is​ ​not​ ​a​ ​recommendation​ ​to​ ​purchase,​ ​sell​ ​or​ ​hold​ ​a security,​ ​inasmuch​ ​as​ ​it​ ​does​ ​not​ ​comment​ ​on​ ​the​ ​security's​ ​market price​ ​or​ ​its​ ​suitability​ ​for​ ​a​ ​particular​ ​investor,​ ​nor​ ​does​ ​it​ ​involve​ ​any audit​ ​by​ ​RAM​ ​Ratings.​ ​The​ ​credit​ ​rating​ ​also​ ​does​ ​not​ ​reflect​ ​the legality​ ​and​ ​enforceability​ ​of​ ​financial​ ​obligations. RAM​ ​Ratings​ ​receives​ ​compensation​ ​for​ ​its​ ​rating​ ​services,​ ​normally paid​ ​by​ ​the​ ​issuers​ ​of​ ​such​ ​securities​ ​or​ ​the​ ​rated​ ​entity,​ ​and sometimes​ ​third​ ​parties​ ​participating​ ​in​ ​marketing​ ​the​ ​securities, insurers,​ ​guarantors,​ ​other​ ​obligors,​ ​underwriters,​ ​etc.​ ​The​ ​receipt​ ​of this​ ​compensation​ ​has​ ​no​ ​influence​ ​on​ ​RAM​ ​Ratings'​ ​credit​ ​opinions or​ ​other​ ​analytical​ ​processes.​ ​In​ ​all​ ​instances,​ ​RAM​ ​Ratings​ ​is committed​ ​to​ ​preserving​ ​the​ ​objectivity,​ ​integrity​ ​and​ ​independence​ ​of its​ ​ratings.​ ​Rating​ ​fees​ ​are​ ​communicated​ ​to​ ​clients​ ​prior​ ​to​ ​the issuance​ ​of​ ​rating​ ​opinions.​ ​While​ ​RAM​ ​Ratings​ ​reserves​ ​the​ ​right​ ​to disseminate​ ​the​ ​ratings,​ ​it​ ​receives​ ​no​ ​payment​ ​for​ ​doing​ ​so,​ ​except for​ ​subscriptions​ ​to​ ​its​ ​publications. Similarly,​ ​the​ ​disclaimers​ ​above​ ​also​ ​apply​ ​to​ ​RAM​ ​Ratings' credit-related​ ​analysis​ ​and​ ​commentaries,​ ​where​ ​relevant.