Published on 18 Nov 2019.
RAM Ratings has reaffirmed AmInvestment Bank Berhad’s (the Bank) AA2/Stable/P1 financial institution ratings (FIRs). The reaffirmed FIRs reflect those of AmBank (M) Berhad (rated AA2/Stable/P1), the core subsidiary of AMMB Holdings Berhad (AMMB or the Group, rated AA2/Stable/P1). As AMMB’s investment banking and stockbroking arm, the Bank is viewed as highly strategic to the Group. We, therefore, expect AmInvestment to receive solid group support if required.
Under a universal banking model, AmInvestment’s operations are strongly linked to that of AmBank and AmBank Islamic Berhad (rated AA2/Stable/P1). This allows the Bank to significantly leverage on its sister banks’ larger balance sheets to underwrite sizeable deals. AmInvestment plays a prominent role in the Malaysian investment banking arena, having upheld its position as the third-largest player in the debt capital market space.
As with other investment banks, AmInvestment’s earnings profile is inherently susceptible to capital market volatility and investor sentiment. The Bank’s underlying pre-tax profit in FY Mar 2019 was 37% lower at RM43.0 mil compared to the previous year’s RM67.8 mil (excluding RM177.3 mil disposal gain). The weaker performance was attributable to subdued fee income amid a slower market environment, although partly offset by lower operating expenses. The Bank has, however, maintained a robust capital position. Its common equity tier-1 and total capital ratios came in at 47.9% and 48.3%, respectively, as at end-June 2019.
Chow Kah Mun
(603) 3385 2501
(603) 3385 2577
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Ratings on AmInvestment Bank Berhad