KUALA LUMPUR: MARC Ratings has affirmed MBSB Bhd
's corporate credit ratings at A+/MARC-1 with a stable outlook, supported by its banking subsidiary and expectations of continued shareholder support.
The rating agency said the ratings reflected MBSB's position as a non-operating financial holding company, with its credit profile closely aligned with that of its wholly owned subsidiary, MBSB Bank Bhd.
It also factored in the high likelihood of support from MBSB's major shareholder, the Employees Provident Fund (EPF), which holds a 56.5% stake.
“MBSB has no borrowings at the holding-company level, with earnings derived primarily through dividends received from MBSB Bank and, since 2024, Malaysian Industrial Development Finance Berhad (MIDF),” MARC Ratings said.
As at end-June 2026, MBSB Bank accounted for 92.3% of the group's total assets and 96.4% of its consolidated gross financing. Annual dividends from the bank have ranged from RM162.8mil to RM458.9mil in recent years.
The group's total financing grew 6.8% in the first half of 2026, driven mainly by corporate and commercial financing as it continued to diversify away from personal financing.
However, MARC Ratings cautioned that greater exposure to larger corporate borrowers could increase concentration risks and capital requirements.
Asset quality remained a key concern, with the gross impaired financing ratio rising to 6.2% as at end-June 2026 from 5.3% at end-2024, remaining well above the Islamic banking industry average.
Financing loss coverage was relatively low at 39.4%, although collateral provided some protection against potential losses.
Meanwhile, earnings remained subdued amid weaker net financing income and higher impairment charges, with pre-tax profit declining to RM390mil in 2025.
Nevertheless, the group's funding profile improved, with its current and savings account ratio rising to 18.6%, approaching its FLIGHT26 target of 20%.
MARC Ratings said MBSB's capitalisation remained strong, with its Common Equity Tier 1 and total capital ratios standing at 17.4% and 19.8%, respectively, as at end-June 2026, comfortably above regulatory minimum requirements.
