MARC has affirmed its financial institution ratings of A/MARC-1 on Bank Muamalat Malaysia and concurrently affirmed its AIS rating on the bank’s Islamic Senior Notes Programme of up to RM2bn. The outlook on the ratings is stable. The rating on Bank Muamalat’s Senior Sukuk programme is equalised to its long-term FI ratings based on the seniority of the Sukuk.
Bank Muamalat provides a full range of Islamic financial services, accounting for 3.4% and 4.8% of domestic Islamic banking gross financings and deposits respectively for the financial year ended March 31, 2017 (FY2017). With an asset size of RM23.5bn, Bank Muamalat is considered a mid-sized bank; it also lacks economies of scale compared to many of its domestic peers which as part of large banking groups benefit from shared infrastructure and resources. These factors, along with weaker-than-industry averages in key metrics, remain the main consideration in affirming Bank Muamalat’s FI ratings.