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RAM Ratings reaffirms BNP Paribas Malaysia’s AA1 rating
Published on 10 Nov 2022.
RAM Ratings has reaffirmed BNP Paribas Malaysia Berhad’s (the Bank) AA1/Stable/P1 financial institution ratings.
The ratings reflect our expectation of ready parental support from BNP Paribas SA (the Group), one of the world’s largest financial institutions and among the globally systemically important banks. The Group has, on multiple occasions, demonstrated solid funding and capital support.
BNP Paribas Malaysia forms part of the Group’s footprint in Asia Pacific. The region, while contributing less than 10% of the Group’s aggregate revenue, is identified as an area for further growth and investment. In this regard, the Bank is able to leverage on the Group’s global franchise, international network and technical expertise in wholesale banking.
BNP Paribas Malaysia’s pre-tax profit slid to RM1.3 mil in FY Dec 2021 (2020: RM118 mil) as challenging market conditions weighed on its Global Markets business. In 1H 2022, the Bank reported RM5.8 mil in pre-tax profits (1H 2021: RM5.2 mil pre-tax loss). Earnings volatility is an inherent feature of the Bank’s business, given its focus on wholesale banking, which entails derivative transactions and market making activities. Its robust common equity tier-1 capital ratio of 22.6% as at end-June 2022 provides the Bank an ample loss absorption buffer to support its volatile trading activities. A highly liquid balance sheet also supports the ratings.
Analytical contacts
Lee Yee Von
(603) 3385 2503
yeevon@ram.com.my
Sophia Lee
(603) 3385 2619
sophia@ram.com.my
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
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