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RAM Ratings assigns AAA rating to OCBC Al-Amin; affirms OCBC Malaysia’s AAA rating
Published on 04 Sep 2026.
RAM Ratings has assigned AAA/Stable/P1 financial institution ratings (FIRs) to OCBC Al-Amin Bank Berhad and affirmed OCBC Bank (Malaysia) Berhad’s (OCBC Malaysia or the Bank) FIRs. OCBC Al-Amin’s FIRs are equalised with those of OCBC Malaysia, reflecting RAM’s assessment of a ‘very high’ likelihood of extraordinary support given its highly strategic role as the Bank’s Islamic banking platform.
The affirmation of OCBC Malaysia’s FIRs is premised on its strong domestic franchise and healthy credit metrics. We view the Bank as a core subsidiary of Oversea-Chinese Banking Corporation Limited (the Group), given its integral role in supporting the Group’s regional expansion and diversification ambitions, as well as its position as one of the Group’s largest contributors outside Singapore. Accordingly, we believe that the likelihood of extraordinary parental support, if required, is ‘very high’. Nevertheless, no rating uplift is warranted given the Bank’s already strong stand-alone credit profile.
The Bank’s asset quality continued to strengthen in 2025 and 3M 2026, supported by improved loan recoveries and healthy borrower repayment performance. Its headline gross impaired loan (GIL) ratio declined to a multi-year low of 1.3% as at end-March 2026 (end-December 2024: 2.1%), while the adjusted GIL ratio – which excludes impaired retail financing less than 90 days past due – receded to 1.0% (end-December 2024: 1.7%). Both indicators outperformed the industry average, underscoring a sustained improvement and marked turnaround in the Bank’s asset quality profile.
OCBC Malaysia expects credit costs to settle at a more normalised level for full-year 2026 (3M 2026: annualised 30 bps), reflecting a more cautious provisioning stance in response to heightened global uncertainties. While higher relative to the negligible impairment charges and net writebacks recorded over the past two years, we view the increase to be manageable considering the Bank’s strong earnings-generating capacity.
Pre-tax profit rose 14% y-o-y to RM2.0 bil in FY Dec 2025 (FY Dec 2024: RM1.8 bil), driven by a net provision writeback, continued loan growth and higher investment and trading gains. This translated into healthy pre-tax return on assets of 1.9% and return on risk-weighted assets 3.3%. While revenue growth momentum carried into 2026, heftier impairment charges led to a 6% decline in pre-tax profit to RM485 mil in 3M fiscal 2026 (3M fiscal 2025: RM514 mil). Sound earnings accretion continues to bolster OCBC Malaysia’s capital strength, with its post-dividend common equity tier-1 capital ratio standing at 15.2% (including unaudited net profit for 3M 2026) as at end-March 2026 (industry: 14.2%; end-December 2024: 15.6%).
OCBC Malaysia’s strong deposit franchise anchors its funding profile, as reflected in its high proportion of current and savings account and retail deposits (end-March 2026: 52% and 42% of customer funding, respectively; industry: 36% for both indicators). This is supported by the Bank’s wealth management franchise and transaction banking capabilities, which underpin its deposit-gathering efforts. Its regulatory liquidity coverage ratio and net stable funding ratio stayed comfortably above minimum requirements as at end-March 2026.
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
© Copyright 2026 by RAM Rating Services Berhad
Rating Rationale: OCBC Al-Amin Bank Berhad
