MARC has affirmed its financial institution ratings of A/MARC-1 on Bank Muamalat Malaysia Berhad (Bank Muamalat) and A_IS rating on the bank’s Islamic Senior Notes Programme (Senior Sukuk) of up to RM2.0 billion. The ratings outlook is stable. The ratings incorporate Bank Muamalat’s healthy capitalisation levels, stronger asset quality metrics and improved profitability trend. If the bank sustains its overall improvement, the long-term rating and/or the outlook could be revised upwards. 

Bank Muamalat registered pre-tax profit of RM114.7 million (1H2020: RM28.6 million) on the back of a 43.4% y-o-y increase in net financing to RM333.4 million in 1H2021. The bank’s financing base grew 18.3% y-o-y to RM19.5 billion during that period, maintaining the growth momentum that began in 2020. The growth has been led by personal financing, which registered a 37.4% y-o-y increase to RM5.7 billion. Bank Muamalat has attributed the strength of its growth to a shift in its marketing strategy.

Bank Muamalat’s gross impaired financing ratio stood at 1.08% as at-end 1H2021, lower than the industry average of 1.46%, partly due to the assistance extended to its customers as well as its larger financing base. The bank’s Common Equity Tier 1 and total capital ratios stood at 14.1% and 17.9% as at end-June 2021, providing a buffer against potential asset quality weakening. The retail deposit franchise remains modest with individual deposits accounting for 12.5% of total funding while the proportion of current and savings account deposits fell marginally to 35.2% (end-2020: 36.1%).

Fahmi Hawari, +603-2717 2946/ fahmi@marc.com.my;

Haziq Najmuddin, +603-2717 2965/ haziq@marc.com.my;

Farhan Darham, +603-2717 2945/ farhan@marc.com.my.