16  June 2015  - 21:10
Moody’s lowers local currency bank deposit ratings of Malaysian banks due to new methodology

Moody's in its press release titled "Moody's concludes reviews on nine Malaysian financial institutions; assigns Counterparty Risk Assessments to eight banks" has stated that "as a result of the implementation of Moody's new bank rating methodology, in particular the change in Moody's view that the capacity for government support is best reflected by the government's bond rating, which is A3 in the case of Malaysia, Moody's has lowered the local currency bank deposit ratings of Malaysian banks that were previously positioned above Malaysia's A3 government rating.

In particular, Moody's has downgraded the local currency deposit ratings of Malayan Banking Berhad (Maybank), Public Bank Berhad (Public Bank), CIMB Bank Berhad (CIMB Bank) and CIMB Islamic Bank Berhad (CIMB Islamic Bank) to A3 from A1, and the long-term local currency bank deposit rating of Hong Leong Bank Berhad (Hong Leong Bank) to A3 from A2. These ratings are now positioned at Malaysia's sovereign rating level, and have a positive outlook in line with the positive outlook on the government bond rating."

In addition, Moody's has assigned counterparty risk assessments (CR Assessments) to eight banks stating, "Moody's has assigned CR Assessments to eight banks - and their branches where applicable - in line with Moody's new bank rating methodology. The CR assessments are as follows: (1) AmBank -- A3(cr)/P-2(cr);(2) CIMB Bank -- A3(cr)/P-2(cr); (3) CIMB Islamic Bank -- A3(cr)/P-2(cr); (4) Hong Leong Bank -- A3(cr)/P-2(cr); (5) HSBC Malaysia Bank Berhad -- A1(cr)/P-1(cr); (6) Maybank -- A2(cr)/P-1(cr); (7) Public Bank -- A2(cr)/P-1(cr); (8) RHB Bank -- A3(cr)/P-2(cr)."

As a result of the above, the credit rating by Moody's for Maybank is as follows:

Malayan Banking Berhad
- Long-term and short-term local currency deposit ratings downgraded to A3/P-2 from A1/P-1, with a positive outlook
- Long-term and short-term foreign currency deposit ratings remain unchanged at A3/P-2, with a positive outlook
- Foreign currency senior unsecured MTN rating remains unchanged at (P)A3
- Foreign currency commercial paper rating remains unchanged at P-2
- Foreign currency preferred stock rating affirmed at Baa2(hyb)
- BCA and adjusted BCA remain unchanged at a3
- Assignment of CR Assessment of A2(cr)/P-1(cr)

Malayan Banking Berhad, Hong Kong Branch
- Foreign currency commercial paper rating remains unchanged at P-2
- Foreign currency senior unsecured MTN rating remains unchanged at (P)A3
- Assignment of CR Assessment of A2(cr)/P-1(cr)

Malayan Banking Berhad, Singapore Branch
- Foreign currency commercial paper rating remains unchanged at P-2
- Foreign currency senior unsecured MTN rating remains unchanged at (P)A3
- Assignment of CR Assessment of A2(cr)/P-1(cr)

The full press release can be downloaded below.
Information on Maybank's credit ratings is available here.