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RAM Ratings affirms AA1 ratings of RHB Bank Group entities
Published on 26 Nov 2025.
RAM Ratings has affirmed the respective AA1/Stable/P1 financial institution ratings of RHB Bank Berhad (RHB Bank or the Group) and its core subsidiaries, RHB Islamic Bank Berhad and RHB Investment Bank Berhad. Both entities’ ratings are aligned with the Group’s, underpinned by an expectation of ‘very high’ likelihood of extraordinary parental support if needed. The ratings of the entities’ debt facilities have also been affirmed (Table 1).
The affirmations reflect RHB Bank’s strong domestic banking franchise and sound credit metrics. Contributing a respective 8% and 9% of the banking system’s deposits and loans as at end-June 2025, RHB Bank is the fourth-largest banking group in the country by total assets. It maintains commendable market shares in residential property financing (11%), small and medium enterprise (SME) financing (9%) and auto financing (5%).
RHB Bank’s capitalisation remained a key credit strength, with a post-dividend common equity tier-1 capital ratio consistently above 15% in the last few years (end-June 2025: 15.9%). Asset quality is healthy, with an overall gross impaired loan (GIL) ratio and GIL coverage ratio (including regulatory reserves) of 1.51% and 128%, respectively, as at end-June 2025 (end-December 2023: 1.74% and 118%). The domestic GIL ratio stood at 1.27%, continuing to outperform the industry’s 1.42%. For FY Dec 2025, the Group expects credit costs to remain contained between 15 and 20 bps (1H FY Dec 2025: 18 bps), with further improvement in its GIL ratio.
Despite normalised credit costs and a larger cost base, pre-tax profit (excluding one-off gains) rose 5% y-o-y to RM3.9 bil in FY Dec 2024, driven by strong fee income, forex gains and treasury activities. Lower impairment charges in 1H FY Dec 2025 further lifted pre-tax profit by 6% y-o-y to RM2.0 bil. This translated to a sound average pre-tax return on assets of 1.2% across both periods. Alongside robust capitalisation, RHB Bank’s healthy loan loss reserves and solid pre-provision profit generation offer ample loss absorption buffers against potential credit slippage.
RHB Bank’s funding and liquidity profile remains satisfactory, with current and savings account and retail deposits constituting a respective 28% and 45% of total deposits as at end-June 2025 (end-December 2023: 28% and 41%).
Further strengthening of the Group’s GIL ratio and continued traction of the retail deposit base to AAA-median levels could provide upside to the current rating in the intermediate term.
Table 1: Ratings of entities under RHB Banking Group
Analytical contacts
Lee Yee Von
(603) 2708 8217
yeevon@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: RHB Bank Berhad
Rating Rationale: RHB Islamic Bank Berhad
