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RAM Ratings assigns P1 ratings to AmBank’s and AmBank Islamic’s Commercial Papers Programmes
Published on 06 Nov 2024.
RAM Ratings has assigned P1 ratings to AmBank (M) Berhad’s RM4 billion Commercial Papers Programme and AmBank Islamic Berhad’s RM3 billion Islamic Commercial Papers Programme. These facilities will accord the respective banks and the larger AMMB Holdings Berhad (AMMB or the Group) greater flexibility to manage funding costs.
AMMB’s key credit metrics have remained largely intact since our review in May 2024. Notably, the Group’s net interest margin (NIM) improved in 1Q FY Mar 2025 following active management of funding costs, rising to an annualised 1.84% from 1.76% in FY Mar 2024. In its latest strategy reveal, the Group indicated that it would tolerate a higher loans-to-deposits ratio of 96% to 99% (end-June 2024: 98%) to boost the NIM. AMMB’s asset quality also remained healthy with a gross impaired loan (GIL) ratio of 1.7%, with strong loss absorption buffers as reflected in its GIL coverage (with regulatory reserves) ratio of 101% and common equity tier-1 ratio of 13.2%. The next five years under its Winning Together strategic roadmap will see AMMB placing a stronger emphasis on lending to mid-sized corporates and small and medium enterprises. It will also focus on enhancing its wealth and asset management franchise and digital offerings.
RAM Ratings affirmed AMMB Holdings Berhad’s corporate credit ratings and the financial institution ratings of AmBank (M) Berhad and AmBank Islamic Berhad at AA2/Stable/P1 on 24 May 2024. For more details, please refer to our full credit rating rationales for these entities published in May 2024.
Analytical contacts
Chan Yin Huei
(603) 3385 2498
yinhuei@ram.com.my
Sophia Lee
(603) 3385 2619
sophia@ram.com.my
Media contact
Sakinah Ariffin
(603) 3385 2500
sakinah@ram.com.my
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 2024 by RAM Rating Services Berhad
Rating Rationale: AMMB Holdings Berhad & AmBank (M) Berhad
