HSBC Amanah Malaysia gets AAA/Stable/P1 rating as a financial institution

RAM Ratings has reaffirmed HSBC Amanah Malaysia’s (the bank) AAA/Stable/P1 financial institution ratings and the AAA/Stable rating of its RM 3 billion Multi-Currency Sukuk Programme (2012/2032).

The reaffirmation is premised on HSBC Amanah’s strategic role as the Islamic banking arm of HSBC Bank Malaysia (rated AAA/Stable/P1) and one of HSBC Holdings’s two global “amanah” or Islamic banking hubs. The bank is operationally integrated with HSBC Malaysia and leverages on the HSBC Group’s global franchise, international network and expertise. Parental support is envisaged to be readily available when needed.

As such, the Bank’s ratings are equated with its parent, HSBC Malaysia.

RAM Ratings noted that HSBC Amanah posted a pretax profit of RM229.4 million in FY December 2019 (FY December 2018: RM211.6 million), 8% higher year-on-year due to higher financing income from financial assets and deposit placements with financial institutions. The increase in the Bank’s current and saving account deposits (+54%) also contributed to an overall lower cost of funds relative to the Islamic banking industry.

Pretax profit fell to RM20.3 million in Q1 FY December 2020 (Q1 FY December 2019: RM58.6 million) as a result of heftier forward-looking impairment charges on financing.

RAM Ratings expects the bank’s profitability to remain under pressure in view of the low profit rate environment, muted financing growth and higher impairment charges given the weaker macroeconomic environment.

"Like other banks, HSBC Amanah may incur a modification charge arising from hire-purchase and other fixed-rate financing subject to the moratorium," the company said in an online statement.

Meezan Bank completes merger with Pakistani branch of HSBC Oman Pakistan

The merger of the Pakistani Branch Operation of HSBC Bank Oman with Meezan Bank was completed on November 6, 2015. All customers of the former branch have automatically become customers of Meezan Bank. 

"We welcome all our new customers and look forward to enjoying a long and beneficial relationship with all our valued customers," stated Meezan Bank in a statement to the Karachi Stock Exchange.

The entire operations of HSBC Oman Pakistan are being converted into a shari'ah-compliant mode under the guidance of Bank’s Shariah Supervisory Board. The acquisition of this single HSBC Oman branch marks the 500th branch of Meezan Bank.

Meezan Bank has the distinction of being the only bank that has acquired three foreign banks in Pakistan. In 2002, Meezan Bank started its commercial banking business with the acquisition of Societe Generale Pakistan, converting its operations into a shari'ah-compliant mode. In October 2015, Meezan Bank celebrated the first anniversary of the successful amalgamation of HSBC Pakistan.

Meezan Bank’s Founding President and CEO Irfan Siddiqui said, “At the time of inception in 2002, Meezan Bank was the smallest bank in the country. Alhamdulillah, 13 years later, it is not just the largest Islamic bank, but also the eighth-largest bank in Pakistan. On behalf of Meezan Bank, I would like to thank all our shareholders and customers for their continuous support and dedication for the betterment of Islamic banking in Pakistan. We value the trust that our shareholders and customers put in us in providing top of the line Islamic banking products and services. We are committed to providing to our customers the highest level of service and realising our vision of establishing 'Islamic banking as banking of first choice'.”