Moody’s Ratings has affirmed Maybank Singapore Limited’s (MSL) A1 long-term foreign and local currency deposit ratings, maintaining a stable outlook. The affirmation reflects the bank’s robust asset quality, stable funding, and liquidity, alongside moderate profitability. MSL’s A1 deposit ratings are bolstered by a high probability of support from the Singaporean government, given its significant market share and status as a domestic systemically important bank.
The bank’s problem loans ratio is expected to remain below 1% over the next 12 to 18 months, supported by its focus on low-risk housing and auto loans. MSL’s credit reserves, which exceed 133% of its problem loans as of 31 December 2024, provide a buffer against potential losses. However, the bank faces risks from its rapid loan growth, increased focus on small and medium-sized enterprise loans, and external economic factors such as US trade policies.
MSL’s return on tangible assets is projected to stay moderate at around 0.5% in the coming months. Its cost-to-income ratio remains higher than other Singaporean banks due to smaller economies of scale. The bank’s Common Equity Tier 1 ratio rose to 16.2% by the end of 2024, though it is expected to moderate as MSL optimises capital through loan growth and dividends.
An upgrade of MSL’s ratings is unlikely, given its alignment with its parent company, Malayan Banking Berhad. However, a downgrade could occur if Maybank’s support diminishes or if MSL’s asset quality deteriorates significantly.
“`
