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Credit ratings

Moody's Affirms Maybank Singapore Limited's Credit Ratings with Stable Outlook

Strategic Insights

— 1 min read

Moody's Investors Service has reaffirmed Maybank Singapore Limited's (MSL) credit ratings, citing the bank's strong asset quality and capital, stable funding and liquidity, and moderate profitability. The affirmation reflects Moody's assumption of a high probability of support from the Government of Singapore in times of need, as well as MSL's sizable deposit market share in Singapore and its designation as a domestic systemically important bank.

Key Takeaways:

  • MSL's A1 deposit ratings, a3 Adjusted Baseline Credit Assessment (BCA), and BCA were affirmed by Moody's, with a stable outlook.
  • The bank's strong asset quality and capital, stable funding and liquidity, and moderate profitability were noted by Moody's as key factors in the affirmation.
  • MSL's A1 deposit ratings are two notches higher than its a3 Adjusted BCA, reflecting Moody's assumption of a high probability of support from the Government of Singapore.
  • The bank's credit reserves, which amounted to more than 133% of its problem loans as of 31 December 2024, will mitigate new losses.
  • MSL's focus on low-risk housing and auto loans is expected to keep the bank's problem loans ratio below 1.0% over the next 12-18 months.
  • The bank's high credit concentration to its parent, Maybank, through interbank placements and repurchase agreements, as well as its rapid loan growth and growing focus on riskier SME loans, pose some risks to its credit profile.

Statistics:

  • MSL's Common Equity Tier 1 (CET1) ratio increased to 16.2% as of 31 December 2024 from 14.5% a year ago.
  • The bank's cost to income ratio will stay higher than other Singapore banks due to its smaller economies of scale.
  • MSL's liquidity coverage ratios, reported on a consolidated basis with Maybank's branch in Singapore, were 172% and 159% for SGD- and all-currency liquidity coverage ratios for the fourth quarter of 2024, respectively.

Sources:

  • Moody's Ratings (Moody's)
  • Maybank Singapore Limited (MSL)
  • Government of Singapore
  • Malayan Banking Berhad (Maybank)
  • Basel III credit and operational risk standards

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