RAM Ratings assigns P1 rating to CIMB Group’s proposed CP Programme, affirms ratings of domestic subsidiaries

Published on 25 Aug 2023.

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RAM Ratings has affirmed the AA1/Stable/P1 corporate credit ratings of CIMB Group Holdings Berhad (the Group) and the AAA/Stable/P1 financial institution ratings of CIMB Bank Berhad, CIMB Islamic Bank Berhad and CIMB Investment Bank Berhad. We have also assigned a P1 rating to the Group’s proposed RM3 billion Conventional Commercial Papers Programme and affirmed ratings of the said entities’ debt facilities (Table 1). Meanwhile, the P1 rating of CIMB Group’s RM6 billion Commercial Papers Programme (2015/2022) has been withdrawn following the facility’s maturity. 

Our rating action considers the Group’s strong franchise in ASEAN and Malaysia, sound capital and liquidity buffers, and healthy pre-provision earnings generation. CIMB Group’s ratings continue to factor in our expectation of extraordinary government support in times of need, given the Group’s systemic importance to Malaysia. CIMB Group is the second-largest bank in the country and ranks fifth in the ASEAN region by assets. 

The Group counts Malaysia, Indonesia, Singapore and Thailand as core markets, with overseas operations contributing about 40% of total loans. Foreign exposure (particularly to Indonesia and Thailand) and chunky impairments have kept its headline gross impaired loan ratio higher than that of domestic peers (end-March 2023: 3.2%). Portfolio reshaping efforts under the Group’s Forward 23+ strategy should yield some improvements on the asset quality front over time.

CIMB Group’s credit cost ratio continued to ease in 2022 (50 bps; 2021: 70 bps) and is expected to decline to around 45-55 bps this year. Even as asset quality headwinds persist amid uncertainties, we believe the Group’s sizeable buffer of overlays will help cushion the effects of potential fresh provisioning needs from further credit deterioration.

Thanks to reduced impairment charges and topline improvements led by loan book expansion (+7.7% y-o-y), a slightly higher net interest margin (NIM, +6 bps) and growth in fee-based income, the Group’s pre-tax profit (adjusted to exclude non-recurring items) was up 33% at RM8.5 bil in FY Dec 2022 (FY Dec 2021: RM6.4 bil). While NIM compression will inevitably dampen earnings in 2023, the Group is still likely to chart better earnings as provisioning needs are anticipated to be milder going forward, considering the substantial overlays set aside over the last few years.

CIMB Group’s funding and liquidity profile and capitalisation remain key rating strengths, comfortably meeting minimum regulatory requirements.

Table 1: Ratings of CIMB Group and domestic entities under our coverage

Note: The one-notch differential between CIMB Group’s long-term corporate credit rating and the AAA long-term financial institution rating
of its subsidiaries reflect the Group’s structural subordination as a non-operating holding company and its moderate debt load at the holding company level.


Analytical contacts
Loh Kit Yoong
(603) 3385 2493

Wong Yin Ching, CFA 
(603) 3385 2555


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2023 by RAM Rating Services Berhad

Rating Rationale: CIMB Group Holdings Berhad & CIMB Bank Berhad

Rating Rationale: CIMB Islamic Bank Berhad

Rating Rationale: CIMB Investment Bank Berhad

Ratings on CIMB Group Holdings Berhad