[RAM] Completion of SME Bank and EXIM Bank transfers to Bank Pembangunan has no rating impact

The completion of Bank Pembangunan Malaysia Berhad’s (BPMB) acquisition of Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank) and Export-Import Bank of Malaysia Berhad (MEXIM) from Minister of Finance (Incorporated) (MoF Inc.), as announced by BPMB on 1 May 2025, does not have any rating impact. SME Bank and MEXIM are now wholly owned subsidiaries of BPMB. 

The transaction consolidates MoF Inc.’s ownership of these development financial institutions (DFIs) under a single entity. Marking the second phase of the government’s DFI consolidation plan following BPMB’s acquisition of Danajamin Nasional Berhad in 2021, the consolidation aims to create a larger entity with greater scale to meet national development goals. As a consolidated group, BPMB will have an enlarged asset base of approximately RM52 billion.

BPMB provides medium to long-term financing to sectors vital to the country’s socio-economic development while MEXIM supports and promotes Malaysia’s external trade. SME Bank nurtures and caters to the financing needs of SMEs, a segment which accounts for more than a third of the country’s GDP. Together, the three institutions play complementary roles within the development finance ecosystem, addressing distinct segments of the economy. 

Both BPMB and MEXIM are currently rated AAA/Stable/P1 by RAM (see Table 1 for issue ratings), which mirrors the Government of Malaysia’s sovereign credit strength. While details of the operational integration have not been disclosed at this time, we expect the strategic mandates of the respective banks to stay intact in the immediate term, with some potential refinements in business alignments later. MoF Inc. remains BPMB’s ultimate shareholder. 

The overall financial impact of the consolidation on BPMB is anticipated to be manageable. The transaction was executed through a share swap involving the issuance of new shares to MoF Inc. Management has indicated that the transaction will not significantly affect BPMB’s capitalisation. As at end-September 2024, prior to the acquisition, BPMB’s tier-1 and total capital ratios were a strong 29.6% and 34.4%, respectively. The ongoing liquidation of Danajamin, when completed, would also provide some uplift to capitalisation levels.




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