[MARC] MARC Ratings affirms Cagamas’ ratings with stable outlook

MARC Ratings has affirmed its ratings on Cagamas Berhad’s bond and sukuk issuances as follows:

The outlook on all ratings is stable.

The ratings reflect Cagamas’ significant role in the domestic financial system as the national mortgage corporation and a key liquidity provider to financial institutions, primarily through the purchase of housing loans and other consumer receivables, with total assets of RM50.0 billion as of end-2024.

In 2024, Cagamas’ loan portfolio — its primary asset — declined by 9.7% to RM43.6 billion, reflecting a slowdown in new purchase-with-recourse transactions, driven by the normalisation of banking liquidity conditions and deposit costs, alongside a more selective asset acquisition strategy. Asset quality remained strong, underpinned by a predominantly mortgage-backed portfolio. Gross impaired loans under the purchase-without-recourse scheme stood at 0.28% (2023: 0.35%), well below the industry average of 1.16% for property-related financing.

Pre-tax profit increased to RM310.9 million (2023: RM303.6 million), supported by a rise in net interest income (+29.8% to RM163.4 million) and stronger contributions from Islamic operations (+4.9% to RM195.4 million). Return on assets held steady at 0.60%, while the cost-to-income ratio was contained at 18.3%.

Cagamas benefits from stable, long-term funding, underpinned by its position as the country’s largest issuer of corporate debt securities. Interest rate and liquidity risks are mitigated through close asset-liability matching, managed within a duration gap policy limit of six months. Capitalisation remains strong, with Common Equity Tier 1 and total capital ratios of 37.9% and 38.4%, as measured against bank regulatory standards.

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