[RAM] RAM Ratings affirms CIMB Thai's AA2 financial institution rating

RAM Ratings has affirmed CIMB Thai Bank Public Company Limited’s (CIMB Thai or the Bank) AA₂/Stable/P1 financial institution ratings and the AA₃/Stable rating of its RM2 bil Tier-2 Subordinated Debt Programme (2014/2044). 

The ratings benefit from an uplift based on RAM’s assessment of the high likelihood of support from CIMB Thai’s immediate parent, CIMB Bank Berhad (rated AAA/Stable/P1), when needed, reflecting the Bank’s strategic role in CIMB Group Holdings Berhad’s (the Group) ASEAN-focused strategy. Under its Forward30 strategy, CIMB Thai is reallocating capital within its consumer banking segment to improve weak risk-adjusted returns, particularly in auto financing. Repositioning itself as a niche player, the Bank is focusing on wholesale banking and wealth management, which collectively have contributed over half of its pre-tax profits in recent years. It remains the Group’s largest generator of cross-border income, with THB1.1 bil (RM145 mil) booked outside of CIMB Thai in FY Dec 2024.

CIMB Thai’s gross impaired loan (GIL) ratio eased to 2.6% as at end-June 2025, down from 3.4% at the end-December 2023, slightly better than the Thai banking industry’s average of 2.8%. This improvement was driven by sizeable loan disposals and write-offs. However, underlying asset quality pressures persist, as seen in the higher formation of net newly classified impaired loans ratio of 1.3% in FY Dec 2024 (FY Dec 2023: 0.9%). Fresh impairments mainly originated from the auto lending portfolio, the GIL ratio of which rose to 2.6% by end-June 2025, compared to 1.8% at the end of December 2023. This underscores the sluggish economy and poorer repayment capacity of borrowers. Low car prices contributed to a higher credit cost ratio of 1.8% in fiscal 2024 while pre-emptive management overlays for the auto segment kept the metric high at an annualised 1.2% in 1H fiscal 2025.

The Bank’s exposure to customers with direct exports to the US is limited. While management continues to assess the broader implications of US tariffs, potential credit deterioration is expected to be manageable. This will be supported by the much smaller SME exposure as a result of CIMB Thai’s portfolio deleveraging strategy in the last few years and tightened credit underwriting standards. A robust common equity-tier 1 capital ratio of 17.0% as at end-December 2024 (end-December 2023: 16.4%) (industry: 17.3%) combined with stronger loan loss coverage provides an ample cushion to absorb potential credit weakening. The Bank’s GIL coverage ratio was a lofty 170% on the same date (end-December 2023: 126%). 

CIMB Thai’s return on assets has ranged between 0.4% and 0.8% over the past five years, constrained by an elevated operating cost structure and impairment charges as well as thinning margins. In FY Dec 2024 and 1H FY Dec 2025, profitability stayed modest following continued margin compression and hefty provisions. Earnings will continue to be pressured in the near term from potential credit headwinds and narrowing margins.


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

Amy Lo
(603) 2708 8289
amy@ram.com.my