RAM assigns AA3/stable, A1/stable for Bank Islam’s Sukuk Murabahah

KUALA LUMPUR: RAM Ratings has assigned a AA3/ Stable and A1/ Stable ratings for Bank Islam Malaysia Bhd’s senior and subordinated Sukuk Murabahah respectively, to be issued under Bank Islam Malaysia Bhd’s proposed RM10 billion Sukuk Murabahah programme.

RAM said it has also reaffirmed thebank’sAA3/Stable/P1financial institution ratings together with its A1/ Stable rating for the bank’s RM1 billion Subordinated Sukuk Murabahah Programme (2015/2045).

“The reaffirmation reflects our expectation that the bank will be able to count on ready financial support from its major shareholder, Lembaga Tabung Haji, in times of need.

“Nonetheless, any significant change in the fund’s propensity to support the bank or in its effective shareholding would necessitate a reassessment of the ratings,” it said in a statement yesterday.

The ratings agency noted that Bank Islam’s market position was still limited compared to larger domestic universal banking groups.

“This remains a challenge in expanding the bank’s retail deposits, which only made up a relatively small 11 per cent of total deposits as of end-March 2018 compared to the industry’s average of 38 per cent.

“That said, the bank continued to display commendable asset quality, with a low gross impairedfinancing ratio of 1.0 per cent as of the same date,” it said, adding, the bank’s capital position also remained strong with commonequity tier- 1 and total capital ratios of 12.6 per cent and 16.5 per cent, respectively. — Bernama