by NUR HANANI AZMAN / pic by BLOOMBERG

MALAYAN Banking Bhd (Maybank) denies the allegations that it will face major financial trouble owing to exposure to Genting Hong Kong Ltd, describing it as “baseless”.

“With regards 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 of Genting Hong Kong, Maybank would like to state vehemently that these allegations are baseless.

“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 and Malaysian Financial Reporting Standard requirements, and these accounting treatments are also subjected to comprehensive reviews by our external auditors and regulators,” Maybank spokesperson said in a written reply to The Malaysian Reserve (TMR) yesterday.

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 Bank Bhd and RHB Bank Bhd.

Singapore’s Straits Times reported that these three banks are among some of the chief unsecured creditors of Genting Hong Kong, with a combined exposure of US$600 million (RM2.51 billion).

Genting Hong Kong’s liquidation filing came just a week after its German ship-building 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.

“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,” the spokesperson added.

Meanwhile, CIMB said it does not disclose or comment on specific names or clients.

“Given the worldwide pandemic, certain sectors such as leisure and hospitality are inevitably affected. In this context, CIMB has already taken proactive measures such as prudent provisioning, to protect our asset quality.

“Our business remains resilient and capital remains strong. We are on track to achieve our 2021 key financial targets including our credit cost guidance to the market,” CIMB told TMR in an email reply.

However, RHB said the bank is unable to comment on reports made by the media in relation to Genting Hong Kong.

At the time of writing, Genting Cruise Lines (Dream Cruises) did not respond to questions sent by TMR.

Its general line is unreachable when contacted by TMR.

Dream Cruises appeared to have taken its booking engine offline as no future sailings were listed or bookable.

Purpose-built for the Asian market, Genting Dream, the first ship of the fleet, debuted in November 2016, with her sister ship World Dream joining in November 2017, offering guests cruising from Guangzhou, Hong Kong and Singapore the highest levels of service, as measured by crew to passenger ratio, and most spacious comfort as measured by gross tonnes per lower berth.

Further expanding the Dream Cruises’ family, Explorer Dream joined in 2019 with homeports in Shanghai, Dalian and Tianjin during summer and Australia and New Zealand in winter.

Tan Sri Lim Kok Thay has resigned as Genting Hong Kong chairman and CEO, days after the cruise operator said it would wind up its business after failing to secure funding to pay off its debts.

In a Hong Kong Stock Exchange filing, the company announced that Lim had stepped down from his posts, effective Jan 21, 2022.

Au Fook Yew also resigned as deputy CEO, group president and the company ED.

In a Jan 19, 2022, filing, Genting Hong Kong filed to wind up after failing to secure funding to pay its debts and had “exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements”.

It added the company had no access to further liquidity under its debt documents and available cash balances are expected to run out around end-January 2022, according to its cashflow forecasts.