RAM Ratings affirms AAA financial institution ratings of Maybank and its banking entities

Published on 21 Nov 2023.

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RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings (FIRs) of Malayan Banking Berhad (Maybank or the Group) and its banking subsidiaries. Concurrently, the ratings of the entities’ sukuk/debt facilities have also been affirmed (listed in Table 1). 

The rating action reflects Maybank’s dominant market position as the largest bank in Malaysia, its strong funding capabilities and proven management track record. Maybank’s diverse income sources continue to generate healthy operating income before impairment charges. This, combined with its robust capitalisation, provides the Group with sufficient financial headroom to withstand asset quality pressures. Considering Maybank’s systemic importance to Malaysia, we believe extraordinary support will come through if needed.

Credit conditions have become more challenging with slower global economic growth amid a higher interest rate environment. Still, the Group has ample financial buffers to weather credit headwinds from heightened inflationary pressures and residual pandemic-related stresses. As at end-June 2023, Maybank retained RM1.7 bil of management overlays, with 44% allocated for its retail and retail SME portfolios. The Group’s loan loss coverage (including regulatory reserves) stayed robust at 152% while gross impaired loan ratio was a healthy 1.5% as at end-June 2023 helped by recoveries, write-offs and low formation of newly impaired loans. Recently, the Group revised downwards its guidance for credit cost ratio to 30-35 bps for fiscal 2023 (previously, 35-40 bps). 

Maybank’s financial performance is expected to stay resilient. The Group enjoys a diversified earnings profile thanks to its commendable franchise in investment banking, stockbroking and insurance which contributes a steady stream of fee-based income. Maybank is also well-equipped to fend off challenger banks in the digital space with its established mobile banking solution and offerings, supported by robust digital infrastructure and platforms as well as continued investments to enhance IT capabilities. 

In FY Dec 2022, Maybank registered a higher profit before tax of RM12.2 bil (+11.6% y-o-y), thanks to a substantial reduction in net impairment charges and broader margins. Given higher cost of funds, margins narrowed in 1H fiscal 2023 although profitability remained relatively sound with an annualised return on risk-weighted assets and return on assets of 3.1% and 1.3%, respectively. 

Maybank Islamic Berhad’s and Maybank Investment Bank Berhad’s FIRs mirror those of the Group, given our view that these core subsidiaries are strategically important to the latter as Maybank operates a leveraged model. Maybank Islamic, the Group’s flagship Islamic banking entity, is the largest Islamic bank in Malaysia and is well regarded in the global Islamic finance industry. The Group’s investment banking and stockbroking arm, Maybank Investment, is a prominent name in the local investment banking scene, consistently ranking among the top three in the domestic equity and debt capital market league tables.


Table 1: Ratings of entities and debt issues


Analytical contacts
Chan Yin Huei
(603) 3385 2498

Julian Chan
(603) 3385 2486

Media contact
Sakinah Ariffin
(603) 3385 2500


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: Malayan Banking Berhad

Rating Rationale: Maybank Islamic Berhad

Rating Rationale: Maybank Investment Bank Berhad

Ratings on Malayan Banking Berhad