Moody’s Investors Service has upgraded Malayan Banking Bhd’s (Maybank) financial strength rating from C- to C, with a stable outlook.
In a statement yesterday, Moody’s added that Maybank’s subordinated debt and deposit ratings were unaffected.
The ratings agency said the upgrade reflected Maybank’s improved financial fundamentals as a result of its diversification into the generally safer and more profitable retail banking business, as well as its emphasis on improving risk management.
“In conjunction with the current stabilisation in economic conditions, these developments offer the prospects of reducing its relatively high level of delinquencies and protecting future asset quality,” Moody’s said.
Maybank, it noted, was the dominant market player, controlling about 20% of system deposits, more than twice those of its closest rival.
It said Maybank’s size gave it benefits of economies of scale that smaller institutions did not enjoy and “which it has leveraged to invest in technology with the aim of enhancing efficiency and competitiveness.”
Moody’s added that it believed the initiatives should partially alleviate the pressure of operating in an environment where there might be further consolidation and greater foreign participation.
Maybank, the largest of the 10 core banks in Malaysia, reported total assets of RM173.2bil as at Dec 31, 2003. –AFX-Asia