KOTA KINABALU: Sabah Development Bank Bhd (SDB) has a strong capability of meeting its financial obligations.

According to an SDB press release, Ram Rating Services Bhd has reaffirmed the bank's debt instruments ratings of AA1/Stable/P1.

Ram is the leading and largest credit rating agency in Southeast Asia.

The agency publishes credit ratings to give an independent, forward-looking opinion about an issuer's ability to repay its financial obligations.

The AA1 rating also indicates SDB is resilient against adverse changes in circumstances, economic conditions and/or operating environments.

Last week, the issue on SDB was raised and debated in the state assembly sitting.

Sabah Finance Minister Datuk Seri Masidi Manjun had disclosed that the current government is inheriting a bad legacy of billions of ringgit in non-performing loans by SDB.

"The 'stable' outlook reflects Ram's expectation that the long-term rating will be unchanged over the immediate term.

"SDB's commercial papers are also affirmed at P1, which is the highest short-term rating assigned by Ram, indicating a strong capability to meet short-term financial obligations.

"The ratings continue to be anchored by Sabah's very strong likelihood of support for the bank and its debt borrowings - a commitment firmly articulated to Ram and SDB's investors.

"The state's financial capacity is underpinned by its robust fiscal position and cash reserves," SDB said.

https://www.nst.com.my/news/nation/2024/07/1077380/ram-ratings-reaffirms-sabah-development-banks-aa1-rating