KUALA LUMPUR: RAM Rating Services Bhd has assigned an AA3 rating to AmIslamic Bank Bhd's proposed RM3 billion Senior Sukuk Musyarakah Programme.
The ratings agency said on Wednesday, July 7 that it had also reaffirmed AmIslamic's long- and short-term financial institution ratings at AA3 and P1, respectively.
Concurrently, the long-term rating of the Bank's RM400 million Subordinated Sukuk Musyarakah (2006/2016) has been reaffirmed at A1. All the long-term ratings have a stable outlook.
The ratings hinge on the fact that AmIslamic is a carve-out from AmBank (M) Berhad's (AmBank) Islamic banking operations. RAM Ratings reaffirmed AmBank's AA3/P1 financial institution ratings in February 2010, with a stable outlook.
'Aside from possessing a credit-risk profile that is similar to that of its parent, the Bank also relies on the back-room operations and risk-management system of AmBank, on top of leveraging on its branch network and e-channels,' said Promod Dass, RAM Ratings' head of financial institution ratings.
As a group, both banks are formidable players in the auto-financing sector, commanding a collective 20.9% of this market as at end-December 2009.
AmIslamic's asset quality has improved considerably in the last few years. As at end-December 2009, the bank's gross and net non-performing-financing ratios had eased to 1.8% and 1.0%, respectively.
Coupled with higher net financing income and lower financing-loss provisions, the bank achieved a 62.5% (annualised) growth in its pre-tax profit to RM260.0 million in the first nine months of FY March 2010.
Its Tier-1 and overall risk-weighted capital-adequacy ratios also remained sound at 10.2% and 15.0%, respectively, as at end-December 2009.
RAM Ratings expects the bank's credit fundamentals to continue progressing as the economic recovery gains traction in 2010.
The ratings agency said on Wednesday, July 7 that it had also reaffirmed AmIslamic's long- and short-term financial institution ratings at AA3 and P1, respectively.
Concurrently, the long-term rating of the Bank's RM400 million Subordinated Sukuk Musyarakah (2006/2016) has been reaffirmed at A1. All the long-term ratings have a stable outlook.
The ratings hinge on the fact that AmIslamic is a carve-out from AmBank (M) Berhad's (AmBank) Islamic banking operations. RAM Ratings reaffirmed AmBank's AA3/P1 financial institution ratings in February 2010, with a stable outlook.
'Aside from possessing a credit-risk profile that is similar to that of its parent, the Bank also relies on the back-room operations and risk-management system of AmBank, on top of leveraging on its branch network and e-channels,' said Promod Dass, RAM Ratings' head of financial institution ratings.
As a group, both banks are formidable players in the auto-financing sector, commanding a collective 20.9% of this market as at end-December 2009.
AmIslamic's asset quality has improved considerably in the last few years. As at end-December 2009, the bank's gross and net non-performing-financing ratios had eased to 1.8% and 1.0%, respectively.
Coupled with higher net financing income and lower financing-loss provisions, the bank achieved a 62.5% (annualised) growth in its pre-tax profit to RM260.0 million in the first nine months of FY March 2010.
Its Tier-1 and overall risk-weighted capital-adequacy ratios also remained sound at 10.2% and 15.0%, respectively, as at end-December 2009.
RAM Ratings expects the bank's credit fundamentals to continue progressing as the economic recovery gains traction in 2010.
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