KUALA LUMPUR, Dec 21 (Bernama) -- RAM Ratings has reaffirmed the AA2/Stable/P1 financial institution ratings of RHB Islamic Bank Bhd, as well as the AA3/Stable rating of the Bank’s RM5.0 billion Subordinated Sukuk Murabahah Programme (2014/2034).
The ratings are premised on its expectation that the bank would continue to benefit from ready parental support in view of its strategic importance as the Islamic banking arm of RHB Bank.
“Operating under a universal banking model, the bank leverages significantly on its group’s financial flexibility, branch network and risk management systems.
“Furthermore, the bank is able to derive funding support from the group via restricted profit-sharing investment accounts arrangement, which amounted to RM8.6 billion, or 16 per cent of its total profit-bearing funds as at end-September 2018,” it said in a statement.
Given the group’s focus on shariah financing and its target of a 40 per cent contribution by the segment to the group’s total financing, RHB Islamic’s financing base expanded by a rapid 42 per cent from RM34.1 billion as at end-December 2016 to RM48.3 billion as at end-September 2018.
Meanwhile, RHB Islamic’s net financing margin improved to 1.6 per cent in the nine-month of fiscal 2018 (fiscal 2016: 1.4 per cent) albeit still narrower than that of Islamic banking peers.