KUALA LUMPUR: Moody’s Ratings has affirmed AmBank (M) Bhd’s A3/P-2 long- and short-term foreign-currency deposit ratings, with the outlook remaining stable.
The rating agency, in a statement, also affirmed AmBank’s A3 foreign-currency senior unsecured rating, A3/P-2 long- and short-term local-currency and foreign-currency Counterparty Risk Ratings, as well as its baa2 Baseline Credit Assessment (BCA) and Adjusted BCA.
“The affirmation of AmBank's A3 ratings reflects the bank's strong capitalization that balances its moderately higher asset risks compared to domestic peers.
“The BCA also considers the bank's stable funding and moderate liquidity,” Moody’s said.
The bank’s A3 deposit rating is two notches above its baa2 BCA, reflecting Moody’s expectation of a very high probability of support from the Malaysian government in times of need.
Moody’s said risks to AmBank’s asset quality stem from its high single-name borrower concentration, higher exposure to small and medium enterprise borrowers compared with domestic peers, as well as above-average exposure to the construction and real estate sectors.
“We expect AmBank's problem loans ratio to remain stable at around 1.5%-2.0% over the next 12-18 months, supported by stable domestic operating conditions and fuel subsidies which limit the pass-through of higher oil prices to domestic households and businesses.
“The bank's loan-loss coverage ratio stood at 70% as of March 31, 2026, an adequate level although lower compared to domestic peers,” Moody’s said.
It expects AmBank’s return on tangible assets to remain stable at around 0.9% over the next 12 to 18 months, supported by stable net interest margins and growth in non-interest income.
It also expects a modest decline in the bank’s capitalisation over the next 12 to 18 months, driven by stronger risk-weighted asset growth and higher dividends to its parent, AmBank Group, which plans to increase its dividend payout ratio to 60% over the next few years.
Nevertheless, Moody’s expects AmBank to remain well capitalised and maintain its tangible common equity-to-risk-weighted assets ratio at around 15% in 2026 and 2027.
It said an upgrade of AmBank’s A3 foreign-currency deposit rating is unlikely as the rating is already at the same level as Malaysia’s A3 sovereign rating.
Moody’s could downgrade AmBank’s ratings and BCA if its tangible common equity-to-risk-weighted assets ratio declines to 14.5% and its problem loan ratio rises above 3%.
A significant weakening of the bank’s funding and liquidity could also put pressure on its ratings.
AmBank had total assets of RM141bil as at March 31, 2026.
