Maybank to provide multi-currency facility

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KUALA LUMPUR: Malayan Banking Bhd (Maybank) provides multi-currency facility for fund-raising activities outside the country following a growing clients.

Its group president/chief executive officer, Datuk Abdul Farid Alias, said there were specific situations for the lending to be in US dollars.

“Historically, we have relied on our limited deposits like interbank and the money-market, and these are not a good way to manage the exposure.

“As we are not a natural US dollar deposit-taking institution and we do not have natural US dollar depositors in the country or around the region, the most appropriate way to manage this is to have a proper medium-term funding strategy,” he told reporters after the bank’s annual general meeting here on Tuesday.

He said this when asked to comment on the bank’s intention to undertake a fund-raising exercise for working capital, general banking and other corporate purposes in a foreign country.

On Monday, the country’s largest bank had announced the preparation of special-purpose audited financial statements to comply with the legal requirements of the fund-raising exercise.

“The medium-term funds like this are typically more expensive than the deposits but obviously these are the right practice for any institutions to have,” he said.

Abdul Farid said the bank was cautiously optimistic that Malaysia’s gross domestic product would grow at 4.5 per cent in 2015 despite the introduction of the goods and services tax (GST).

“You will see an impact.

Inflation will probably move up and therefore, business activities will probably slow down slightly this year to adjust themselves with the GST.

“We are quite sure to see a loan growth of between eight and nine per cent in Malaysia and this is something that we have faced in the market before,” he said.

Meanwhile, Moody’s Investors Service has assigned an A3 long-term foreign currency senior unsecured debt rating to Maybank’s upcoming Samurai bonds.

The rating outlook is positive, said the rating agency.

The A3 rating assigned to Maybank’s senior unsecured Samurai bonds was in line with the bank’s A3 foreign currency deposit rating, it said in a statement.

The Samurai bonds will constitute an unconditional, unsubordinated and unsecured obligation of Maybank, and will rank pari passu with Maybank’s other senior unsecured obligations.

The exact amount, tenor and coupon of the bonds are yet to be determined by the issuer.

The rating was assigned on the condition that no material changes were made to the draft terms and conditions of the notes reviewed by Moody’s, it said.

The rating agency said a potential upgrade of the Malaysia A3 sovereign rating would likely lead to an upgrade of Maybank’s A3 foreign currency deposit and senior debt ratings, assuming the bank’s standalone credit metrics remain robust.

However, the positive outlook on Maybank’s foreign currency deposit rating could be revised to stable if there is a revision of outlook of the sovereign bond rating to stable, or a significant weakening of the bank’s standalone credit profile, resulting in a multi-notch decrease in its baseline credit assessment, it said.

Maybank is the largest bank in Malaysia with consolidated assets of RM640 billion as at December 31, 2014. — Bernama