Published on 18 Nov 2020.
RAM Ratings has reaffirmed Deutsche Bank (Malaysia) Berhad’s (Deutsche Malaysia or the Bank) AA1/Stable/P1 financial institution ratings. The reaffirmation reflects our belief that Deutsche Bank AG (the Group) will readily extend support to the Bank, underscored by Deutsche Malaysia’s strategic importance to its parent. The ratings also consider the Bank’s established franchise in Malaysia’s wholesale banking arena, particularly in fixed income and currencies. The Bank’s solid liquidity and capital positions will provide ample buffers against increased market volatility amid the harsher operating environment.
As part of Deutsche Bank AG’s footprint in ASEAN, Deutsche Malaysia considers multinationals and big local companies as its core customers. The Bank is able to leverage the Group’s extensive network and technical expertise, thereby allowing it to participate in cross-border deals and provide sophisticated financial solutions and services to its clients.
Deutsche Malaysia has been delivering a healthy profit performance. In FY Dec 2019 and 1H FY Dec 2020, the Bank reported a respective RM299.2 mil (+13%) and RM202.4 mil (+10% y-o-y) of pre-tax profit. The improvement stemmed from its commendable trading income amid heightened market-making activities. In tandem with this, its annualised return on risk-weighted assets broadened to a respective 3.2% and 4.3% in those periods.
All said, volatile earnings remain an inherent feature as most of the Bank’s gross income is market-driven. Deutsche Malaysia’s capital and liquidity positions have also stayed strong. Its common equity tier-1 capital ratio stood at 16.7% as at end-June 2020 while its liquidity coverage and net stable funding ratios were comfortably above the respective regulatory minimums.
Chow Kah Mun
(603) 3385 2501
(603) 3385 2577
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
© Copyright 2020 by RAM Rating Services Berhad
Ratings on Deutsche Bank (Malaysia) Berhad