Maybank well positioned to weather uncertainties

PETALING JAYA: Maybank has reiterated that its liquidity and capital positions has been designed to weather stresses arising from changes in the operating environment, such as the ongoing Covid-19 situation.

In a statement, group president and CEO Datuk Abdul Farid Alias said the bank has always ensured that the Group remained ahead of the capital and liquidity requirements set by bank regulators, particularly in its three key markets of Malaysia, Indonesia and Singapore.

“As such, for the past five years, these levels have been consistently higher than the full requirements, despite them being under gradual implementation by the regulators,” he said.

The group’s statement followed Fitch Ratings’ downgrade of the bank’s long term issuer default rating (IDR) to ‘BBB+’ from ‘A-, although it maintained its outlook as stable. Maybank’s senior debt ratings and medium-term note programme were also downgraded to ‘BBB+’ from ‘A-’.

However, it did note that Maybank remains better capitalised than peers and is in a firm position to weather potential strains on earnings and asset quality arising from the weaker operating environment.

Fitch had also stated that the bank’s liquidity is well supported by its superior domestic deposit franchise and the central bank’s highly accommodative liquidity management actions.

“I was disappointed when I first saw this report but was also aware that Fitch had recently downgraded the credit rating of many banks especially in the Asia Pacific, Middle East and South African regions.

“While this is the prerogative of the rating agencies, our view is that all effort including by the banking sector should be focused primarily on helping the people to survive the crisis, and then eventually help reverse this pandemic-induced economic slowdown given that the cause of this slowdown is peculiar and its impact significant,” he said.

Abdul Farid noted that the downgrade will likely increase the bank's funding costs, but said the bank would do its best to absorb it without passing it on to customers.

Maybank’s liquidity capital ratio as at December 2019 stood at 141%, while its total capital ratio was 18.23% and its fully loaded CET1 capital ratio 14.58%, above the current regulatory requirements of 100%, 10.5% and 7% respectively.

source https://www.thesundaily.my/business/maybank-well-positioned-to-weather-uncertainties-DB2254072