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RAM Ratings reaffirms ratings of SMBC Malaysia

RAM Ratings reaffirmed the AA1/Stable/P1 financial institution ratings of Sumitomo Mitsui Banking Corp. Malaysia Bhd.

The rating agency said the ratings reflect the credit profile strength of the lender's ultimate parent, Sumitomo Mitsui Financial Group Inc. It also takes into account the bank's close operational ties with its parent, as well as its strategic role in the group's growth in Asia.

However, the bank's ratings are moderated by the lender's small domestic stature as a fairly new player. Credit quality of some of its borrowers has weakened due to economic environment challenges.

RAM Ratings does not expected any extensive weakness in the bank's loan portfolio. The lender's common equity Tier 1 capital ratio of 17% also provides some buffer.