Fitch affirms Malayan Banking

Fitch Ratings said it removed Malayan Banking Bhd's long-term local- and foreign-currency issuer default ratings from Rating Watch evolving and affirmed them at A-, along with its dollar-denominated subordinated debt issue at BBB+ and its Singapore-dollar-denominated innovative tier 1 capital securities at BBB.

The restoration of the stable outlook on the ratings is based on the imminent capital replenishment measures being undertaken for core capital, Fitch said, in the form of a substantially underwritten rights issue that is expected to raise 5 billion to 6 billion in Malaysian ringgit in new equity.

With core capital restored to a higher level, Fitch said it expects the bank to be better cushioned against the impact of very challenging economic conditions this year.

But given the uncertainties in the economic conditions, the combined effects of the write downs and performance of core operations will have to be closely monitored, the agency said.

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