ANNOUNCEMENT DETAILS

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ANNOUNCEMENT DATE
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06-Dec-2018
CATEGORY
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RATING ANNOUNCEMENT
SUB-CATEGORY
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RATING ANNOUNCEMENT
TITLE
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MUFG Bank (Malaysia) Berhad
ISSUER NAME
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DESCRIPTION
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-
CONTENT
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RAM Ratings has reaffirmed the AAA(bg)/Stable rating of securities issued under MUFG Bank (Malaysia) Berhad's (MUFG Malaysia or the Bank, formerly known as Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad) USD500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme (the Programme). The enhanced issue rating reflects an irrevocable and unconditional guarantee extended by MUFG Malaysia's parent, MUFG Bank Ltd (MUFG Bank, rated AAA/Stable/P1 by RAM), on the sukuk. Concurrently, we have reaffirmed the AA1/Stable/P1 financial institution ratings of the Bank.

MUFG Malaysia is a subsidiary of Mitsubishi UFJ Financial Group's (MUFG or the Group) commercial banking arm  one of the world's largest banking groups and Japan's leading banking group. MUFG Malaysia's ratings benefit from a strong likelihood of support from its parent. The ratings also reflect its robust capitalisation and superior loan quality. 

MUFG Malaysia's total loan base expanded to RM24 billion as at end-June 2018 (end-March 2017: RM19 billion), supported by placements from MUFG Bank under a cash collateral scheme. MUFG Malaysia's exceptional loan quality is attributable to its focus on the Malaysian-domiciled entities owned by established Japanese conglomerates, MNCs and highly rated domestic names. 

As at end-June 2018, the Bank recorded a robust common equity tier-1 capital ratio of 17.7%. However, loan and deposit concentration remain a factor in MUFG Malaysia's business given its small stature. As at end-June 2018, its 10 largest loans accounted for 56% of lending while the Bank's top 10 depositors constituted about 40% of total customer deposits. In FY March 2018, the Bank registered a pre-tax profit of RM390 million (annualised growth of 33%) owing to a spike in trading income brought about by an increased client flow. Trading income, on average, contributes about 41% of MUFG Malaysia's gross income, which subjects the Bank to some earnings volatility.
 
Media contact
Goh Kwan Khhy
(603) 7628 1099
[email protected]

Media contact
Padthma Subbiah
(603) 7628 1162
[email protected]


The credit rating is not a recommendation to purchase, sell or hold a security, in as much 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
Copyright 2018 by RAM Rating Services Berhad

*** DISCLAIMER ***
THIS COMPUTER SYSTEMS AND APPLICATIONS ARE OWNED AND OPERATED BY BURSA MALAYSIA.
ATTACHMENT
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SOURCE
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BURSA
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