RAM Ratings has affirmed AMMB Holdings Berhad's (AMMB or the Group) corporate credit ratings and the financial institution ratings of its banking subsidiaries at AA2/P1. All long-term ratings carry a stable outlook. 

The affirmations reflect our expectation that AMMB's credit metrics will stay commensurate with its current ratings. AMMB's asset quality indicators are projected to remain broadly sound, supported by strengthened oversight measures introduced since the COVID-19 pandemic. These measures have enabled the Group to identify and address emerging risks early. Under its Winning Together strategy (FY2025-FY2029), which emphasises a strategic pivot towards higher-yielding segments, business banking loans rose 10% for the first nine months of FY Mar 2025. In contrast, retail lending contracted by 1% over the same period, driven by an 11% decline in auto financing and more selective growth in mortgages (+2%). This shift is expected to enhance profitability in the medium term. 

AMMB continues to maintain a healthy overlay reserve, which stood at RM514 mil as at end-December 2024. Its gross impaired loan ratio held steady at 1.7% on the same date as the credit cost ratio eased to 17 bps in the absence of one-off items as well as provision reversals. The Group's strong capitalisation and healthy profit-generating capacity should enable it to navigate heightened economic risks from the US administration's tariff policy. The direct exposure of AMMB's loan book to tariffs (estimated at a little under 5%) is deemed manageable given the short-term nature of the loans, although the knock-on effects on the broader economy remain uncertain at this stage.

AMMB's net loan-to-funds ratio, which includes funding from Cagamas, senior notes and capital securities, is still at a comfortable level of 87%. The proportion of current and savings account (CASA) deposits made up a reduced 32% of total deposits as at end-December 2024 (end-March 2024: 37%) as the Group trims off