THE Malayan Banking Bhd (Maybank) has dismissed as baseless claims that it will face a major financial problem owing to exposure to Genting Hong Kong.

“With regard to recent news articles suggesting that Maybank is one of the three Malaysian banks that will face a major financial problem owing to exposure to Genting Hong Kong, Maybank would like to state that these suggestions are baseless,” it said in a written reply to a query on the issue.

Media reported that three Malaysian banks’ profits will take a major hit, as trouble looms over cruise ship operator Genting Hong Kong – a major Asian corporate casualty of the Covid-19 pandemic.

The three financial institutions are Maybank, CIMB Bhd and RHB Bank Bhd.

The Singapore Straits Times report said the trio are among chief unsecured creditors of the holding company, with a combined exposure of US$600 million (RM2.5 billion).

Genting Hong Kong’s liquidation filing comes a week after its German shipbuilding subsidiary MV Werften went into insolvency – a development that triggered cross-defaults for the group’s various financing arrangements, amounting to more than US$2.7 billion, it reported.

“While it does not comment on its exposure to customers or alleged customers owing to confidentiality obligations, Maybank would like to re-enforce that it observes strict accounting treatment related to provisioning and impairment of loans, as per International Financial Reporting Standard & and Malaysian Financial Reporting Standard requirements,” said the written reply.

These accounting treatment are subject to comprehensive reviews by our external auditors and regulators.”

Maybank has a rigorous asset quality monitoring process, whereby vulnerable borrowers are identified and managed accordingly from the onset of any potential asset quality weakness.

It said as such, “loan provisioning will be proactively made from the beginning of any such asset quality weakness based on the borrower’s risk rating with the bank”

“Therefore, Maybank would like to state that its current net credit charge of guidance for loan provisioning remains unchanged and it can confirm that its financial position remains strong.” – Bernama, January 24, 2022.