KUALA LUMPUR: RAM Rating Services Bhd (RAM Ratings) has affirmed the AAA/Stable/P1 financial institution ratings of Public Bank Bhd
and its core subsidiary, Public Islamic Bank Bhd.
In a statement today, the rating agency said the affirmation is anchored by the group’s consistently superior asset quality and sturdy loss-absorption buffers, reflecting its prudent credit culture.
"The passing of Public Bank’s founder and major shareholder in late 2022 is not expected to have a major impact on its strategic direction and operations.
"The group’s experienced leadership team, along with robust internal policies and controls, continues to provide a stable foundation for its business,” it said.
RAM Ratings said Public Bank’s gross impaired loan (GIL) ratio saw mild deterioration but remained commendably low at 0.42 per cent as at end-December 2022 compared to 0.31 per cent at the end of December 2021 and the industry’s 1.7 per cent.
"Any further credit deterioration in the group’s loan book due to current inflationary pressure and increased borrowing costs is not envisaged to be significant.
"We draw comfort from the traditionally strong credit profiles of the group’s borrowers and its strong collection procedures,” it said.
RAM Ratings said Public Bank’s track record of profitability has been unbroken since its inception.
"For the financial year ending Dec 2023, we expect the group’s net interest margin to narrow - as with other banks - owing to upward deposit repricing and keener deposit competition.
"With a strong retail deposit heritage and an extensive branch network, Public Bank boasts one of the largest proportions of retail deposits in the banking system.
"Individual depositors made up slightly over half of its customer deposits (industry: 38 per cent), providing diversity and stability to the group’s funding,” it added. - Bernama
