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RAM Ratings affirms HSBC Malaysia’s AAA ratings
Published on 14 Aug 2026.
RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings of HSBC Bank Malaysia Berhad (the Bank). The affirmation reflects the Bank’s established franchise, healthy credit fundamentals and expected parental support from HSBC Holdings plc, given its strategic role in the Group’s Asia and wealth management growth plans.
We expect HSBC Malaysia’s asset quality to remain resilient, backed by prudent underwriting, a focus on affluent customers and strong provisioning buffers. As at end-March 2026, its gross impaired loan ratio improved markedly to 1.7% from 3.1% as at end-December 2024 (industry average: 1.4%), chiefly owing to the reclassification of loans previously under repayment relief to performing status after the prescribed curing period, and changes in the classification of rescheduled and restructured loans. The credit cost ratio rose to an annualised 22 bps in 1Q FY Dec 2026 (FY Dec 2025: net writeback of 2 bps), partly reflecting additional allowances for external risks.
HSBC Malaysia demonstrates earnings resilience despite its mid-size stature, supported by diversified income streams. Pre-tax profit stayed strong at RM2.1 bil in FY Dec 2025 even with margin pressure after a 25-bp OPR cut, a smaller loan base and reduced impairment writebacks. While net interest margin narrowed to 2.6% (FY Dec 2024: 2.8%), non-interest income helped offset the decline. In 1Q fiscal 2026, stronger non-interest income drove a 9% y-o-y increase in pre-tax profit to RM581 mil, lifting the annualised return on risk-weighted assets to 4.0%.
HSBC Malaysia’s capitalisation remains robust, with a common equity tier-1 ratio of 15.8% as at end-March 2026. Funding and liquidity continue to benefit from a high proportion of current and savings account deposits, which accounted for 58% of total deposits compared with the industry’s 36% average.
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 2026 by RAM Rating Services Berhad
