MALAYSIA: RAM Rating Services has revised the outlook on Alliance Bank Malaysia’s long-term ratings from positive to stable. The bank has a ‘A1’/ ‘P1’ financial institution rating while its RM600 million (US$179 million) subordinated bonds are rated ‘A2’. The ratings are attributed to the uncertainties that could occur when key management personnel left the bank at end-March. Alliance Islamic Bank is a subsidiary of Alliance Bank Malaysia.

Downgrade for Tabreed

UAE: Standard & Poor’s Ratings Services has downgraded the long term corporate credit of utility firm National Central Cooling (Tabreed) from ‘B+’ to ‘CCC+’. It also removed the rating from CreditWatch, where it was placed with negative implications last August. The outlook is negative. In addition, S&P has lowered the rating of the senior secured Sukuk certificates, which are due next year, to ‘CCC+’ from ‘B+’, issued by Tabreed 06 Financing Corporation. S&P credit analyst Karim Nassif said the downgrade followed the rating agency’s lowered assessment of Tabreed’s standalone credit profile because of Tabreed’s weak liquidity, its significant refinancing risk over the short to medium term, and the absence of a permanent financing solution to improve liquidity and cash flow generation.

Stable outlook for banks

SINGAPORE: Moody’s Investors Service has assigned a stable outlook to the country’s banking system, reporting that a gradual economic recovery will see better prospects for the banking sector. It also expects local banks to leverage on their Singapore dollar deposit funding to expand loans in line with increasing demand. However, it added that the long-term ratings of its three rated Singaporean banks — DBS Bank, Oversea-Chinese Banking Corporation and United Overseas Bank — are negative due to significant exposures outside of Singapore. All three banks have Islamic subsidiaries.

On its feet again

INDONESIA: Fitch Ratings has upgraded Bank Negara Indonesia’s (BNI) long-term foreign and local currency Issuer Default Ratings (IDRs) to ‘BB+’ from ‘BB’, with a stable outlook. Fitch Ratings Indonesia associate director Humphrey Tija attributes the ratings to the bank’s long-term IDRs, due to BNI’s improved financial profile, as demonstrated by its stronger profitability and better reserved non-performing loans. BNI Syariah is a subsidiary of BNI.

Rating slumps

BAHRAIN: Moody’s Investors Service has downgraded the local and foreign currency deposit ratings of BMI Bank to ‘Baa3’/’Prime-3’ from ‘Baa2’/’Prime-2’, and its bank financial strength rating (BFSR) to ‘D’ from ‘D+’.

The outlook on the ‘D’ BFSR is negative. Moody’s attributed the markdown to BMI Bank’s weakened franchise and profitability as it reduces its cross-border syndicated lending activity that still forms a large part of the bank’s business mix.

This development is driven primarily by the much reduced availability of cheap wholesale funding and the weakened financial health of regional borrowers that has led to a marked deterioration in the risk-reward characteristics of the business.

BMI Bank is a subsidiary of Oman-based BankMuscat specializing in Islamic finance.

On solid ground

UAE: Standard & Poor’s Ratings Services has affirmed its ‘A’ long-term and ‘A-1’ short-term sovereign credit ratings on Ras Al Khaimah (RAK). The outlook is stable.

The ratings are attributed to the intergovernmental relationships within the UAE and the likelihood of extraordinary support in the event of financial stress.

RAK is parent to RAKBANK, which has an Islamic finance firm, Bayt Al Mal Investment Company.