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RAM Ratings affirms Bank of China (Malaysia) at AAA
Published on 15 Oct 2025.
RAM Ratings has affirmed Bank of China (Malaysia) Berhad’s (BOCM or the Bank) AAA/Stable/P1 financial institution ratings.
The ratings incorporate our view of a ‘high’ likelihood of ready financial support from Bank of China (Hong Kong) Limited (BOCHK or the Group) – BOCM’s immediate parent. Wholly owned by BOCHK and ultimately owned by Bank of China Limited, BOCM is a key earnings contributor among BOCHK’s ASEAN subsidiaries, playing an important role in strengthening the Group’s presence in Southeast Asia.
BOCM’s gross impaired loans (GIL) ratio eased to 3.0% as at end-June 2025 (end-December 2023: 3.5%) driven by slower accretion of new impairments, strong recoveries and an enlarged loan base. Reflecting the improved asset quality, the Bank posted net impairment reversals of 5 bps and 11 bps (annualised) in FY Dec 2024 and 1H FY Dec 2025, respectively. GIL coverage (including regulatory reserves) stayed moderate at 87.5% as at end-June 2025.
The Bank’s earnings profile strengthened in fiscal 2024 owing to robust loan growth and the absence of major impairments. Pre-tax profit jumped 42.6% y-o-y to RM301.5 mil, spurred by net interest and investment income growth, lifting the return on risk-weighted assets to 2.5%. BOCM’s steady loan growth and benign credit cost in 1H fiscal 2025 sustained its profit momentum. Going forward, profitability may come under some pressure from narrowing margins and slower loan growth, though expected to remain manageable.
With a common equity tier-1 capital ratio of 17.2% as at end-June 2025, the Bank’s sturdy capital position affords it a good buffer against potential credit impairment and supports business growth.
Analytical contacts
Sean Lim, CFA
(603) 2708 8253
sean@ram.com.my
Lee Yee Von
(603) 2708 8217
yeevon@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.
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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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