[MARC] MARC Ratings affirms CIMB Islamic’s ratings with stable outlook

MARC Ratings has affirmed CIMB Islamic Bank Berhad’s (CIMB Islamic) financial institution (FI) ratings at AAA/MARC-1/Stable. Concurrently, the rating agency has affirmed its ratings on CIMB Islamic’s sukuk issuances as follows:

• RM10.0 billion Senior Sukuk Wakalah Programme (Sukuk Wakalah) at AAAIS/Stable
• RM5.0 billion Tier 2 Junior Sukuk Programme at AA+IS/Stable

CIMB Islamic’s FI ratings are equalised to those of its parent CIMB Bank Berhad (AAA/MARC-1/Stable), given that CIMB Islamic is a core subsidiary of CIMB Bank and is the parent’s Islamic financing arm, contributing 29.4% to CIMB Group’s total financing in 2024. The Tier 2 Junior Sukuk Programme is rated one notch below the long-term FI rating to reflect its subordinated status to the bank’s senior unsecured obligations.

CIMB Islamic’s financing growth moderated to 8.1% in 2024, compared to 12.9% in 2023, due to selective lending amid heightened competitive price pressures. Asset quality improved, with the bank’s gross impaired financing ratio declining to 1.21%, mirroring broader industry trends. Financing loss coverage, inclusive of regulatory reserves, stood at 134.5%, providing a buffer against potential credit losses.

CIMB Islamic’s Common Equity Tier 1, Tier 1, and total capital ratios stood at 14.5%, 15.1%, and 17.7% as of end-2024. Liquidity indicators remained solid, with liquidity coverage ratio at 145.3% and net stable funding ratio at 105.3% as at end-2024, both well above regulatory thresholds.

CIMB Islamic recorded pre-tax profit of RM1.6 billion in 2024, up from RM1.2 billion in 2023, driven by recovery in lending margins. Net financing income continued to make up over 80% of total income, underscoring the strength of its recurring earnings base.

Amirah Aisyah, +603-2717 2969/ amirah@marc.com.my
Darren Leong, +603-2717 2937/ darren@marc.com.my
Elmer Lim, +603-2717 2947/ elmer@marc.com.my