MARC affirms AA+/MARC-1 corporate credit rating on CIMB Group

KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has affirmed its long-term and short-term corporate credit ratings of AA+/MARC-1 on CIMB Group Holdings Bhd (CIMB Group).

The rating house also affirmed its issue rating of AA on the group’s RM10.0bil Basel III-compliant Tier 2 Subordinated Debt Programme, with a stable outlook.

In a statement on Monday, the rating house said the one-notch rating differential between CIMB Group’s long-term corporate credit rating and its SubDebt Programme was in accordance with MARC’s methodology.

CIMB Group is a non-operating financial holding company of CIMB Bank Bhd (CIMB Bank), CIMB Investment Bank Bhd and Indonesia-based PT Bank CIMB Niaga Tbk, all of which are held through 100%-owned CIMB Group Sdn Bhd. 

The group’s long-term rating of AA+ reflects its subordination to its banking subsidiaries, of which CIMB Bank remains the core operating entity, accounting for 82% of total consolidated assets as at end-June 2017 and more than 90% of dividend income historically, the rating house said.

CIMB Bank, which is an operating bank holding company with two main subsidiaries, CIMB Islamic Bank Bhd and Thailand-based CIMB Thai Bank PLC, carries a AAA/Stable rating from MARC.

“The stable outlook reflects MARC’s expectation that the group’s overall credit profile will be maintained against a moderate domestic and regional macroeconomic outlook.

“The ratings remain driven by the performance metrics of the group’s key subsidiaries, and therefore any change in their credit profile would impact CIMB Group,” it said in a statement.