CIMB's capitalisation the lowest among large Malaysian banks: Moody's

It deteriorated further in the first half of 2015.

According to Moody's, CIMB Bank's capitalization is the lowest among large Malaysian banks, and it deteriorated further in 1H 2015 due to RWA growth, one-off restructuring costs and an increase in capital deductions for loan-loss reserve shortfalls.

Here's more from Moody's:

As of June 2015, the bank's Common Equity Tier 1 (CET1) ratio on a consolidated basis (incorporating Moody's adjustments to risk-weighted assets (RWA) for the bank's sovereign debt holdings) was 9.4%, down from 9.9% at end-2014. CIMB Bank's CET1 capital to total assets, a ratio that is not influenced by risk-weight densities, is also the lowest among the large banks in Malaysia.

The bank's CET1 ratio has trended below the average of Moody's rated banks in Malaysia (June 2015: 11.2%). In the absence of any significant capital raising, the bank's CET1 ratio will remain below those of its Malaysian peers, some of which have announced rights issues to boost their capital buffers in 2H 2015.

CIMB Bank's capitalization is pressured by the requirement to pay cash dividends up to its parent company CIMB Group Holdings Berhad (CIMB Group, Baa1 positive). Going forward, CIMB Group will continue to rely on CIMB Bank for most of the dividends it pays to shareholders, which are based on 40% of total group profits.

In comparison, CIMB Group's Indonesian subsidiary PT Bank CIMB Niaga has not upstreamed any of its dividends to the parent since 2011, despite having been until recently the second-largest profit contributor to the group after CIMB Bank