Banking, Finance & Takaful

Moody’s assigns international ratings to CIMB Islamic Bank

coverPic-01Moody’s Investors Service has assigned debt and deposit ratings to CIMB Islamic Bank Bhd, with a stable outlook.

In a statement, the ratings for local currency deposits and issuer stood at A1/P-1and foreign currency deposits and issuer at A3/P-2.

The Bank Financial Strength rating (BFSR) is D+, mapping to a baseline credit assessment (BCA) of ba1. The adjusted BCA, incorporating parental support, isbaa1.

Moody’s said this was the first time it had assigned international ratings for CIMB Islamic.

The A1 long-term local currency deposit and issuer ratings incorporate Moody’s expectation of full parental support from CIMB Bank Bhd (A1 stable, C-/baa1stable), which resulted in the rating uplift from its baseline credit assessment (BCA) of ba1.

Moody’s has assigned deposit ratings to CIMB Islamic on the basis that the ratings applied to the bank’s deposits in accordance with the definition of Islamic deposits laid out in the 2013 Islamic Financial Services Act 2013, which excludes investment accounts with contractual loss-sharing features.

It said this expectation of support was based primarily on CIMB Islamic’s strategic importance to CIMB Group’s (not rated) Islamic banking business in Malaysia.

CIMB Bank owns 100 per cent of CIMB Islamic. The bank’s adjusted BCA, incorporating parental support, is baa1.

Moody’s said the ratings took into account its assessment of the very high probability that the Malaysian Government (A3 stable) would provide support to CIMB Bank, in times of need, which in turn effectively resulted in support for CIMB Islamic.

Source: The Star

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