Find A Rating 
PRESS RELEASES
RAM Ratings affirms Bank Muamalat
Published on 26 Aug 2025.
RAM Ratings has affirmed Bank Muamalat Malaysia Berhad’s (the Bank) A2/Stable/P1 financial institution ratings (FIR) and the A3/Stable rating of its RM1 billion Subordinated Sukuk Murabahah Programme (2016/2036). The one-notch difference between the two ratings reflects the subordination of the facility to the Bank’s senior unsecured obligations.
Bank Muamalat’s credit profile remains anchored by its sound asset quality, underpinned by a notable share of personal financing with salary transfer and deduction arrangements and government-guaranteed home loans, which collectively constitute around 30% of its financing base. While delinquencies may continue to edge up, we expect the slippage to remain contained. As at end-March 2025, the Bank’s gross impaired financing (GIF) ratio stood at 1.2%. Impairment charges were higher last year, primarily owing to non-retail exposures. Management anticipates both the credit cost and GIF coverage ratios to improve by end-fiscal 2025, aided by provision writebacks and recoveries.
The Bank has slowed financing growth as part of a rebalancing strategy, a trend which we anticipate continuing in the near term. This more measured and capital-efficient financing growth, along with the ongoing optimisation of risk-weighted assets (RWA) will support its capital ratios, which have been under strain from a rapid increase in financing in recent years (three-year compound annual growth rate: 16%). The Bank’s common equity tier-1 capital ratio stood at 11.1% (industry: 13.9%). The weaker-than-industry capitalisation is a key moderating factor.
Bank Muamalat’s three-year average return on RWA and return on assets were modest at 1.1% and 0.7%, respectively, lagging peers’. Profitability, although improving, has been weighed down by an elevated cost structure and a relatively low proportion of non-finance income. Nonetheless, the Bank’s strategic pivot towards higher-yielding segments is expected to aid margin expansion. In FY Dec 2024, Bank Muamalat reported a weaker profit before tax of RM129 mil (-56% y-o-y) due to higher impairment charges.
Analytical contacts
Chan Yin Huei
(603) 2708 8296
yinhuei@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
© Copyright 2025 by RAM Rating Services Berhad
