KUALA LUMPUR: RAM Ratings has reaffirmed Sumitomo Mitsui Banking Corporation Malaysia Bhd’s (SMBC Malaysia) AA 1 /Stable/P1 financial institution ratings.
The ratings incorporate RAM’s expectation of ready support from the bank’s ultimate parent, Sumitomo Mitsui Financial Group, Inc. (SMFG) if needed, given its role in the group’s Asia-centric strategy, RAM said in a statement today.
“SMFG has demonstrated firm support for SMBC Malaysia with capital injections over the years – three infusions totalling RM2.1 billion, as well as, interbank deposits and cash collateral placements.
“With an asset base of 207 trillion yen, SMFG stands among the largest financial institution globally and is a mega banking group in Japan,” it said.
Given its small size and preference for higher-tier corporates, RAM said SMBC Malaysia’sportfolio was significantly concentrated in terms of both borrowers and sectors, which exposed the bank to lumpy impairments in times of credit stress.