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RAM Ratings affirms Koperasi Co-opbank Pertama Malaysia’s A3/P2 ratings
Published on 21 Apr 2025.
RAM Ratings has affirmed Koperasi Co-opbank Pertama Malaysia Berhad’s (CBP or the Group) A3/Stable/P2 financial institution ratings.
The ratings reflect CPB’s healthy asset quality and strong loss absorption capacity, moderated by a small franchise, portfolio concentration, and weaker-than peers’ funding and profitability profile. The ratings also factor a credit uplift based on RAM’s assessment of a “moderate” likelihood of extraordinary government support for CBP, given its position as the second largest of five premier cooperatives in the country.
The Group’s asset quality is underpinned by a low-risk personal financing portfolio (82% of total financing), largely comprising non-discretionary salary-deducted facilities extended to civil servants, administered by Biro Perkhidmatan Angkasa. Its gross impaired financing (GIF) ratio stayed stable at 1.7% as of end-December 2024, with GIF coverage adequate at 105.6%. Notwithstanding rapid loan growth in recent periods (3-year CAGR: 22.6%), we expect asset quality to remain manageable.
CBP’s funding profile is primarily wholesale, with its top 10 depositors constituting nearly half of total deposits. This concentration risk is partially mitigated by the Group’s long-standing relationships with its large depositors who are mostly government entities, and its strong liquidity position.
The Group’s net financing margin narrowed marginally to 1.75% in fiscal 2024, reflecting slower personal financing growth and portfolio realignment towards Ar Rahnu and home financing, which are secured but lower yielding. Accordingly, the pre-tax return on assets and return on risk-weighted assets remained soft at 1.1% and 1.5%, respectively. With higher share capital, CBP’s post-dividend estimated tier-1 capital ratio will be stronger at 21.7% (end-December 2023: 17.4%).
Analytical contacts
Chew Wei Li
(603) 2708 8301
weili@ram.com.my
Johan Faizul
(603) 2708 8235
johan@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
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
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