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RAM Ratings affirms Public Bank
Published on 14 May 2026.
RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings of Public Bank Berhad (the Group) and its core subsidiary, Public Islamic Bank Berhad, together with the issue ratings of the entities (Table 1).
The ratings are premised on the Group’s entrenched domestic franchise, excellent asset quality, strong loss absorption buffers and systemic importance, which continue to support its resilience against credit headwinds, including spillover risks from Mideast tensions. While the knock-on effects are still being assessed, any deterioration in asset quality should be contained by the Group’s robust risk management.
Public Bank is Malaysia’s third-largest banking group, with total assets of RM562 bil (including overseas operations) as at end-December 2025 and leading market positions in residential mortgages, auto financing, small and medium enterprise lending and retail unit trusts. Accounting for 17.8% of industry loans and 16.4% of deposits, the Group is designated as one of three domestic systemically important banks.
Credit fundamentals remain strong, with a low gross impaired loan ratio of 0.51% as at end-December 2025 and robust loan loss coverage (including regulatory reserves) of 249%, well above the industry average. Some mild weakness emerged in the overseas portfolio, mainly owing to an impaired Hong Kong syndicated commercial real estate loan and credit strains in Cambodia amid the border crisis. Credit cost, however, remained benign at 2 bps in FY Dec 2025 and is anticipated to stay within the single-digit range this year.
Pre-tax profit rose to RM9.5 bil in FY Dec 2025 (FY Dec 2024: RM8.9 bil), translating into a higher return on risk-weighted assets of 2.66% (FY Dec 2024: 2.61%), driven mainly by contributions from LPI Capital Berhad and stronger investment and unit trust-related fee income. Combined with a common equity tier-1 capital ratio of 13.9% and healthy pre-provision profit, the Group maintains ample loss absorption capacity to withstand potential asset quality slippages. Public Bank’s strategic pivot towards higher-yielding commercial loans and growth in non-interest income streams are anticipated to support earnings resilience in the near to medium term, although external uncertainties may pose downside risks.
Analytical contacts
Jeremy Noel Paul
(603) 2708 8230
jeremynp@ram.com.my
Wong Yin Ching, CFA
(603) 2708 8280
yinching@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 2026 by RAM Rating Services Berhad
Rating Rationale: Public Bank Berhad
