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RAM Ratings affirms AEON Credit’s sukuk ratings; outlook stable
Published on 30 Jun 2026.
RAM Ratings has affirmed the AA3/Stable rating of its Senior and the A1/Stable rating of its Subordinated Sukuk issued under AEON Credit Service (M) Berhad’s (the Group) RM5 bil Sukuk Wakalah Programme. Concurrently, we have also reaffirmed the P1 rating of its RM1 bil Islamic Commercial Papers Programme.
The affirmations reflect AEON Credit’s resilient credit profile, underpinned by sound asset quality, consistently robust profitability and moderate leverage. These strengths are moderated by its sizeable exposure to lower-income borrowers, which are inherently more vulnerable to income shocks and economic downturns. The ratings also benefit from uplift, reflecting our expectations of a ‘high’ likelihood of support from AEON Co., Ltd, the Group’s Japan-based parent and a leading retail and financial services conglomerate, that we view to have a strong credit profile.
AEON Credit maintains a strong domestic franchise in consumer financing market and remains a leading motorcycle financier, funding about 23.6% of new motorcycle sales in FY Feb 2026. Loan growth stayed healthy, with gross receivables increasing 11.4% to RM15.7 bil and pre-tax profit rising 4.7% at RM537.5 mil. Profitability indicators remained strong, with return on assets and return on equity of 3.5% and 18.2%, respectively, placing the Group among the stronger performers in RAM’s portfolio of rated financial institutions, despite absorbing losses from AEON Bank during its start-up phase, which are expected to decline over time.
Notwithstanding the focus on non-prime borrowers, AEON Credit’s asset quality has held steady, with a gross impaired financing ratio of 2.6% as at end-February 2026. Strong recurring earnings, supported by a three-year average net interest margin of 12.1%, cushion high credit costs which averaged 3.8% over the same period. Margins may ease as the Group grows its share of prime borrowers but are expected to remain above industry norms. Loan loss coverage was a healthy 195.4% as at end-February 2026, reinforcing the Group’s loss absorption capacity.
While reliance on wholesale funding is a structural constraint relative to deposit-taking peers, liquidity risk is mitigated by well-staggered debt-maturities, with cash balances and unutilised credit facilities adequately covering short-term borrowings as at end-February 2026. Gearing (adjusted for fair value of hedging reserves) stood at a moderate 3.9 times on the same date.
Analytical contacts
Loh Kit Yoong
(603) 2708 8285
kityoong@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
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