profile search
latest updates
Press Release
10 Dec | Monday
RAM Ratings reaffirms Standard Chartered Saadiq’s AAA/Stable/P1 ratings
RAM Ratings has reaffirmed Standard Chartered Saadiq Berhad’s (Saadiq or 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), with the Bank being able to leverage on its parent’s branch network, technical expertise and risk management systems. We expect ready support from Standard Chartered Malaysia, if required. 
 
Saadiq remains among the smaller Islamic banks in Malaysia, with less than 2% of the segment’s assets as at end-June 2018. Following the Group’s earlier strategy of de-risking its unsecured portfolio, Saadiq’s financing portfolio has largely tilted towards secured financing in recent years. As at end-June 2018, residential and non-residential property financing comprised 59% of the Bank’s financing portfolio while personal financing facilities accounted for only 3% (end-December 2012: 21% and 34%).
 
With a gross impaired financing (GIF) ratio of 1.1% as at end-June 2018, the Bank’s asset quality was still better than the banking industry’s 1.6% on the same date. Although said GIF ratio represented a slippage from end-December 2016’s 0.9% primarily attributable to some weaknesses in its property financing portfolio, the deterioration is still deemed manageable. Additionally, the Bank’s GIF coverage ratio (including regulatory reserves) of 158% as at the same date provides a strong buffer. Over the course of 1H fiscal 2018, the Bank recorded a net writeback of RM3.3 million owing to an increased level of financing funded by the Group’s profit-sharing investment account (PSIA) placements, for which the Bank is not required to make any allowances.  
 
Due to a diminishing base of financing income from a smaller financing book, Saadiq’s pre-provision profit fell to RM47.8 million in fiscal 2017 (fiscal 2016: RM77.1 million). The Bank’s funding and liquidity profile remains supported by its parent through PSIA placements, which stood at a higher RM3.5 billion as at end-June 2018 (end-December 2017: RM1.7 billion). Saadiq’s capitalisation is robust, with respective common equity tier-1 and total capital ratios of 24.1% and 28.4% as at end-June 2018.
 
Analytical contact
Goh Kwan Kheen, Timothy
(603) 7625 1099
timothy@ram.com.my
 
Media contact
Padthma Subbiah
(603) 7628 1162
padthma@ram.com.my
 
Date of release: 10 December 2018
 
 
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 analyses and commentaries, where relevant.
 
Published by RAM Rating Services Berhad
Ó Copyright 2018 by RAM Rating Services Berhad
Print Mail Twitter LinkedIn Facebook Google+
Past Articles
2019
October
September
August
July
June
May
April
March
January
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
September
July
June
May
April
March
2015
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
October
July
May
April
March
2012
December