MARC Ratings has affirmed its ratings on Cagamas Berhad’s bonds and sukuk issuances as follows:
- MARC-1/MARC-1IS on Conventional and Islamic Commercial Papers (CP/ICP) programmes with a combined aggregate limit of RM20.0 billion
- AAA/AAAIS on Conventional and Islamic Medium-Term Notes (MTN/IMTN) programmes of up to RM60.0 billion
The ratings outlook is stable. The key rating drivers remain Cagamas’ status as the national mortgage corporation and its strategic importance in the domestic financial system, underpinned by its strong capitalisation and stable liquidity position.
Cagamas purchased RM19.3 billion worth of loans and financing under its purchase-with-recourse (PWR) scheme in 2022, exceeding its target of RM15.0 billion. The higher purchases were supported by liquidity needs from financial institutions to comply with Bank Negara Malaysia’s requirements. The purchases saw Cagamas’ outstanding loans and financing portfolio increase to RM40.3 billion from RM36.0 billion in the previous year. Notably, no purchases have been made through the purchase-without-recourse (PWOR) scheme since 2018.
Cagamas maintains a strong capital position attributed to its low-risk weight density, minimal impairment losses, and credit exposure to highly rated counterparties. As at end-2022, its total capital ratio stood at 38.0%, providing ample support for future growth. Its funding and liquidity positions have also remained healthy, benefitting from easy access to the domestic capital market with funds raised worth RM24.9 billion issued in 2022. Cagamas recorded higher pre-tax profit of RM300.3 million (2021: RM281.4 million) primarily due to narrow profit margins in the PWR portfolio and decreasing contribution of net income from the high-yielding PWOR assets. Going forward, the significant loans and financing purchased in 2022 are expected to support Cagamas’ operating performance in 2023.