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Bank Industry Risk Analysis: Malaysia Jul 06
Standard & Poors, July 2006
Abstract
Improving asset quality and satisfactory capitalization in the system; Demonstrated system support by the government; and Improving industry structure, following merger of finance arms and current Investment Banking framework. Pressure on interest margins given the increased competition amid a narrow lending focus on consumers and small and midsized enterprises; Slowing loan growth; and Cyclical propensity for corporate borrowers to overleverage. The banking system in Malaysia (foreign currency A-/Stable/A-2; local currency A+/Stable/A-1) has been gradually rebuilding its financial profile after the Asian financial crisis. The banking system's capitalization is satisfactory and there has been progress in implementing basic risk management techniques. Loan quality has benefited from better economic conditions and debt restructuring efforts undertaken by the banks over the years. Consequently,...
Companies mentioned in this report are: Affin Bank Berhad,RHB Bank Bhd.,CIMB Bank Bhd.,Southern Bank Berhad,Hong Leong Bank Bhd. (Unsolicited Ratings),Alliance Bank Malaysia Berhad,AmInvestment Bank Bhd.,CIMB Investment Bank Bhd.,EON Bank Berhad,CIMB Group Holding Bhd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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