Maybank denies it will face financial woes over Genting HK

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Maybank has vehemently denied allegations that it will face major financial trouble due to its exposure to Genting Hong Kong.

Bloomberg

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

It was reported that three Malaysian banks’ profits, including Maybank, are set to take a major hit as trouble looms over cruise operator Genting Hong Kong – a major Asian corporate casualty of the Covid-19 pandemic. The other two banks are CIMB and RHB Bank Bhd.

The report by Singapore’s Straits Times said that these three banks are among some of the chief unsecured creditors of Genting Hong Kong, with a combined exposure of US$600 million (RM2.5 billion).

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

“While we do not comment on our 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 (IFRS) & Malaysian Financial Reporting Standard (MFRS) requirements, and these accounting treatments are also subject to comprehensive reviews by our external auditors and regulators,” the statement said.

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.

“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 our current net credit charge of guidance for loan provisioning remains unchanged and we can confirm that our financial position remains strong,” it said.

Earlier, Subang MP Wong Chen said the government owes taxpayers an explanation whether three Malaysian banks approved unsecured loans to Genting Hong Kong in a reckless manner.

This is in light of news reports that Malayan Banking Bhd, CIMB Berhad and RHB Bank Bhd loaned troubled cruise operator Genting Hong Kong US$600 million (RM2.5 billion).

“The government of Malaysia via various agencies and the Employees Provident Fund (EPF) are substantial shareholders in all three banks.

“The government is supposed to look after taxpayers’ money and a large percentage of working adults are EPF depositors.

Nazir Sufari/TMI

“That being the case, the public has a right to know whether these unsecured loans were approved in a reckless manner,” Wong said in a statement posted on Facebook.

The bankers who approved these loans must also come forward to explain their actions, he added.


Earlier report:

Jan 24, Lim Kok Thay quits as Genting HK chairman, CEO