KUALA LUMPUR: MARC Ratings has affirmed its top tier short and long term ratings for Malaysia's second largest banking group, CIMB Group Holdings Bhd.

CIMB Group had total assets of RM757.9 billion as at end-1Q2024.

The agency also has affirmed an AA rating on the group's RM10 billion Basel III-compliant Tier 2 Subordinated Debt Programme.

Over the past five years, dividends from CIMB Bank accounted for about 77 per cent of CIMB Group's total dividend income on average.

"CIMB Group's long-term rating of AA+ reflects the subordination of the holding company's financial obligations to CIMB Bank, which carries a AAA/Stable rating from MARC Ratings," it said.

CIMB Group is recognised as a domestic systemically important bank (D-SIB) by Bank Negara Malaysia, largely due to the systemic risk posed by CIMB Bank.

MARC Ratings said this importance is highlighted by CIMB Bank's substantial market share, accounting for approximately 17.5 per cent of system loans and 23.3 per cent of core deposits as of the end of the first quarter of 2024 (1Q24).

MARC Ratings said its gross impaired loans have declined as a share of total loans in recent years to a moderate 2.55 per cent as at end-1Q2024.

This is partly helped by write-offs and sales of problematic loans.

MARC Ratings views CIMB Group's capitalisation as healthy, with Common Equity Tier 1, Tier 1 and total capital ratios of 14.5 per cent, 15.2 per cent and 18.2 per cent as at end-1Q2024.

The healthy capital buffers and adequate loan-loss coverage - between 90 per cent and 100 per cent - provide a cushion against potential credit loss and support the group's loan growth.

https://www.nst.com.my/business/corporate/2024/08/1091919/marc-ratings-affirms-top-tier-rating-cimb-group-stable-outlook