[RAM] RAM Ratings affirms AAA/Stable/P1 ratings of Standard Chartered Malaysia and Saadiq

RAM Ratings has affirmed the AAA/Stable/P1 financial institution ratings (FIRs) of Standard Chartered Bank Malaysia Berhad (Standard Chartered Malaysia or the Bank) and its Islamic banking arm, Standard Chartered Saadiq Berhad (Saadiq), whose FIRs are equated to the Bank’s. 

The affirmations reflect the Bank’s well-established franchise, strong funding and liquidity profile, healthy capitalisation and sound asset quality. Its profitability, however, remains softer than peers’. The ratings also consider our view that parental support from Standard Chartered PLC is highly likely in times of need. As a wholly owned subsidiary of Standard Chartered PLC and a key franchise in the ASEAN region, the Bank is deemed strategically important to its parent. 

Standard Chartered Malaysia’s gross impaired loan (GIL) ratio improved to 2.5% as at end-March 2025 (end-December 2023: 3.0%), driven by a large impaired loan settlement. Given the Bank’s conservative classification approach, under which rescheduled and restructured retail loans are qualitatively classified as impaired, this ratio remained above the industry average of 1.4%. On an adjusted basis – excluding retail loans less than three months in arrears – the GIL ratio would stand at a healthier 1.9%. 

Although the Bank’s direct exposure to US tariffs is limited, we remain cautious of the broader economic impact which could lead to lumpy impairments.  We take comfort in Standard Chartered Malaysia’s strong common equity tier-1 capital ratio of 14.7% and loan loss coverage (with regulatory reserves) of 133% as at end-March 2025 which should provide a sufficient buffer against potential credit losses.    

The Bank’s profitability in FY Dec 2024 was significantly affected by normalised impairment expenses and elevated operating and funding costs. Pre-tax profit almost halved to RM345.0 mil, with the return on risk-weighted assets (RoRWA) declining to 1.2% (FY Dec 2023: 2.1%). In 1Q fiscal 2025, the RoRWA rebounded to an annualised 2.8% due to stronger net trading and fee income.

An entrenched presence in the cash management and transaction banking space continues to uphold Standard Chartered Malaysia’s solid deposit funding capabilities. As at end-March 2025, current and savings account balances constituted 68% of customer deposits (industry: 34%) while retail deposits accounted for 44% (industry: 38%).


Analytical contacts
Jeremy Noel Paul
(603) 2708 8230
jeremynp@ram.com.my

Sophia Lee
(603) 2708 8211
sophia@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my