KUALA LUMPUR: RAM Ratings has reaffirmed the respective long- and short-term financial institution ratings of Deutsche Bank (Malaysia) Bhd, at AA1 and P1; the long-term rating has a stable outlook.
In a statement on Friday, Oct 8, RAM Ratings said the ratings were premised on the bank's solid market position in the wholesale-banking sector as well as its ability to leverage on its parent's franchise, network and technical knowledge.
The bank is part of global investment bank Deutsche Bank AG.
RAM Ratings said that although Deutsche Bank Malaysia's asset base was relatively small, it had a sizeable notional off-balance-sheet exposure due to its focus on wholesale banking, particularly as a provider of treasury solutions.
"Nevertheless, we opine that the bank has a comprehensive risk-management system; its market risk is viewed to be moderate.
"The Bank's value-at-risk limit is set at a manageable level of less than 2% of its equity as at end-June 2010," it said.
The rating said that in FY December 2009, Deutsche Bank Malaysia posted a lower pre-tax profit of RM145.39 million (FY Dec 2008: RM194.68 million), mainly caused by its narrower net interest margin.
Although this persisted in 1H FY Dec 2010, more deal flows had boosted the Bank's pre-tax profit to RM103.29 million (discounting a one-off negative accounting adjustment of RM20.64 million), it said.
"Given the bank's focus on corporate banking, however, we opine that its performance is susceptible to fluctuations.
"On the other hand, this is moderated by Deutsche Bank Malaysia's strong liquidity profile and solid capital position; its liquid-asset ratio has been conservatively kept around 100% for the past 5 years (end-June 2010: 106.70%)," it said.
Elsewhere, the bank's capital position is robust, with respective overall and Tier-1 risk-weighted capital-adequacy ratios of 13.12% and 12.86% as at end-June 2010, it said.
In a statement on Friday, Oct 8, RAM Ratings said the ratings were premised on the bank's solid market position in the wholesale-banking sector as well as its ability to leverage on its parent's franchise, network and technical knowledge.
The bank is part of global investment bank Deutsche Bank AG.
RAM Ratings said that although Deutsche Bank Malaysia's asset base was relatively small, it had a sizeable notional off-balance-sheet exposure due to its focus on wholesale banking, particularly as a provider of treasury solutions.
"Nevertheless, we opine that the bank has a comprehensive risk-management system; its market risk is viewed to be moderate.
"The Bank's value-at-risk limit is set at a manageable level of less than 2% of its equity as at end-June 2010," it said.
The rating said that in FY December 2009, Deutsche Bank Malaysia posted a lower pre-tax profit of RM145.39 million (FY Dec 2008: RM194.68 million), mainly caused by its narrower net interest margin.
Although this persisted in 1H FY Dec 2010, more deal flows had boosted the Bank's pre-tax profit to RM103.29 million (discounting a one-off negative accounting adjustment of RM20.64 million), it said.
"Given the bank's focus on corporate banking, however, we opine that its performance is susceptible to fluctuations.
"On the other hand, this is moderated by Deutsche Bank Malaysia's strong liquidity profile and solid capital position; its liquid-asset ratio has been conservatively kept around 100% for the past 5 years (end-June 2010: 106.70%)," it said.
Elsewhere, the bank's capital position is robust, with respective overall and Tier-1 risk-weighted capital-adequacy ratios of 13.12% and 12.86% as at end-June 2010, it said.
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