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RAM Ratings affirms AAA/Stable/P1 ratings of Standard Chartered Malaysia and Saadiq
Published on 01 Oct 2025.
RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings (FIRs) of Standard Chartered Bank Malaysia Berhad (Standard Chartered Malaysia or the Bank) and its Islamic banking arm, Standard Chartered Saadiq Berhad (Saadiq), whose FIRs are equated to the Bank’s.
The affirmations reflect the Bank’s well-established franchise, strong funding and liquidity profile, healthy capitalisation and sound asset quality. Its profitability, however, remains softer than peers’. The ratings also consider our view that parental support from Standard Chartered PLC is highly likely in times of need. As a wholly owned subsidiary of Standard Chartered PLC and a key franchise in the ASEAN region, the Bank is deemed strategically important to its parent.
Standard Chartered Malaysia’s gross impaired loan (GIL) ratio improved to 2.5% as at end-March 2025 (end-December 2023: 3.0%), driven by a large impaired loan settlement. Given the Bank’s conservative classification approach, under which rescheduled and restructured retail loans are qualitatively classified as impaired, this ratio remained above the industry average of 1.4%. On an adjusted basis – excluding retail loans less than three months in arrears – the GIL ratio would stand at a healthier 1.9%.
Although the Bank’s direct exposure to US tariffs is limited, we remain cautious of the broader economic impact which could lead to lumpy impairments. We take comfort in Standard Chartered Malaysia’s strong common equity tier-1 capital ratio of 14.7% and loan loss coverage (with regulatory reserves) of 133% as at end-March 2025 which should provide a sufficient buffer against potential credit losses.
The Bank’s profitability in FY Dec 2024 was significantly affected by normalised impairment expenses and elevated operating and funding costs. Pre-tax profit almost halved to RM345.0 mil, with the return on risk-weighted assets (RoRWA) declining to 1.2% (FY Dec 2023: 2.1%). In 1Q fiscal 2025, the RoRWA rebounded to an annualised 2.8% due to stronger net trading and fee income.
An entrenched presence in the cash management and transaction banking space continues to uphold Standard Chartered Malaysia’s solid deposit funding capabilities. As at end-March 2025, current and savings account balances constituted 68% of customer deposits (industry: 34%) while retail deposits accounted for 44% (industry: 38%).
Analytical contacts
Jeremy Noel Paul
(603) 2708 8230
jeremynp@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: Standard Chartered Bank Malaysia Berhad
