MARC has finalised and released its updated methodology for rating financial institutions following market consultation. The updated Financial Institutions Rating Criteria explains MARC’s approach to assigning our ratings to financial institutions of all sizes and types, both domestic and non-domestic, and their various obligations. This methodology enhances the transparency of MARC’s rating process for financial institutions by identifying and discussing the key analytical areas and rating factors that explain a financial institution’s non-domestic intrinsic credit strength rating (ICSR) at a more granular level. The ICSR excludes the external credit support elements which are incorporated in the final ratings of a financial institution and its obligations.

MARC’s ICSR and financial institution ratings (FIR) reflect our opinion of the relative creditworthiness of financial institutions, which relies on extensive qualitative and quantitative analyses while drawing significantly on our rating committee’s judgement.

While no formal responses to the consultation were received, MARC received generally supportive informal feedback for the proposed updated methodology. In finalising the criteria, MARC did not make any material changes to the content of the exposure draft.

We currently anticipate publishing the ICSRs for our rated universe of financial institutions under the new methodology during the first quarter of 2018 but will update the market further in the event our timeline changes. At this juncture, MARC does not anticipate that the revised rating methodology will result in materially different FIR when applied to new or existing financial institutions in MARC’s rating universe.

The aforementioned rating methodology can be accessed on MARC’s website at Financial Institutions Rating Criteria.

Contacts:
Milly Leong, +603-2717 2938/ milly@marc.com.my;
Sharidan Salleh, +603-2717 2954/ sharidan@marc.com.my.