[RAM] RAM Ratings affirms Koperasi Co-opbank Pertama Malaysia's A3/P2 ratings

RAM Ratings has affirmed Koperasi Co-opbank Pertama Malaysia Berhad’s (CBP or the Group) A₃/Stable/P2 financial institution ratings.

The ratings reflect CPB’s healthy asset quality and strong loss absorption capacity, moderated by a small franchise, portfolio concentration, and weaker-than peers’ funding and profitability profile. The ratings also factor a credit uplift based on RAM’s assessment of a “moderate” likelihood of extraordinary government support for CBP, given its position as the second largest of five premier cooperatives in the country.

The Group’s asset quality is underpinned by a low-risk personal financing portfolio (82% of total financing), largely comprising non-discretionary salary-deducted facilities extended to civil servants, administered by Biro Perkhidmatan Angkasa. Its gross impaired financing (GIF) ratio stayed stable at 1.7% as of end-December 2024, with GIF coverage adequate at 105.6%. Notwithstanding rapid loan growth in recent periods (3-year CAGR: 22.6%), we expect asset quality to remain manageable.

CBP’s funding profile is primarily wholesale, with its top 10 depositors constituting nearly half of total deposits. This concentration risk is partially mitigated by the Group’s long-standing relationships with its large depositors who are mostly government entities, and its strong liquidity position.

The Group’s net financing margin narrowed marginally to 1.75% in fiscal 2024, reflecting slower personal financing growth and portfolio realignment towards Ar Rahnu and home financing, which are secured but lower yielding. Accordingly, the pre-tax return on assets and return on risk-weighted assets remained soft at 1.1% and 1.5%, respectively. With higher share capital, CBP’s post-dividend estimated tier-1 capital ratio will be stronger at 21.7% (end-December 2023: 17.4%).


Analytical contacts
Chew Wei Li
(603) 2708 8301
weili@ram.com.my

Johan Faizul
(603) 2708 8235
johan@ram.com.my

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