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RAM Ratings affirms AAA ratings of HSBC Malaysia and HSBC Amanah
Published on 08 Aug 2025.
RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings of HSBC Bank Malaysia Berhad (HSBC Malaysia or the Bank) and HSBC Amanah Malaysia Berhad (HSBC Amanah).
The rating affirmations underscore the Bank’s established domestic franchise and healthy credit metrics. Supported by prudent underwriting standards and robust loan provisioning buffers, HSBC Malaysia’s asset quality continued to improve and is expected to remain broadly stable, notwithstanding potential downside risks from US tariff policies and the knock-on effects. The ratings also consider our view that extraordinary parental support from HSBC Holdings plc (the Group) is ‘highly likely’ in times of need, given the Bank’s strategic importance to the former and integral role in supporting the Group’s pivot towards Asia and the wealth business.
Excluding differences with industry norms, HSBC Malaysia’s adjusted gross impaired loan ratio eased to less than 1.5% as at end-March 2025 (end-December 2023: below 2%) on the back of a slower accretion of new impairments and strong recoveries. Its credit cost ratio stayed low at 9 bps (annualised) in 1Q FY Dec 2025 following a net reversal of impairment charges last year.
The Bank exhibits a strong profitability profile, with the pre-tax return on assets and return on risk-weighted assets at 2.2% and 3.8%, respectively, in FY Dec 2024. Pre-tax profit climbed to RM2.2 bil in fiscal 2024, thanks to higher investment and fee income as well as a net writeback of loan provisioning charges. Net interest margin (NIM) stayed healthy at 2.8% as the deployment of excess liquidity into financial investments helped alleviate margin pressure from a smaller loan base. Cushioned by the reduction in the statutory reserve requirement, the NIM is expected to see a mild negative impact this year from the recent 25-bps overnight policy rate cut.
HSBC Malaysia’s common equity tier-1 capital ratio held steady at 16.8% as at end-March 2025. Its funding and liquidity profile was still robust, backed by a high proportion of current and savings account deposits, which accounted for 59% of total deposits – well above the 34% industry average.
HSBC Amanah’s ratings are equated to those of HSBC Malaysia, considering its strategic importance to the latter and the highly integrated operations of the two entities. We have also affirmed HSBC Amanah’s issue rating (Table 1).
Analytical contacts
Sean Lim, CFA
(603) 2708 8253
sean@ram.com.my
Sophia Lee
(603) 2708 8211
sophia@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
© Copyright 2025 by RAM Rating Services Berhad
Rating Rationale: HSBC Bank Malaysia Berhad
