[RAM] RAM Ratings assigns AAA and AA1 ratings to Public Bank's proposed RM20 bil Sukuk Murabahah

RAM Ratings has assigned AAA/Stable and AA₁/Stable ratings to the senior sukuk and subordinated sukuk, respectively, under Public Bank Berhad’s (the Group) proposed RM20 bil Sukuk Murabahah Programme. The subordinated sukuk is rated one notch below Public Bank’s AAA long-term financial institution rating because of its subordinated status relative to senior unsecured obligations.

The ratings reflect Public Bank’s dominant domestic franchise, consistently superior asset quality and systemic importance in Malaysia. Despite a more challenging operating environment, the Group maintained solid credit fundamentals in 1H FY Dec 2026. Its gross impaired loan ratio stood at a low 0.5% as at end-June 2026 while annualised credit costs were benign at 7 bps during the period. The Group’s robust common equity tier-1 capital ratio of 13.9%, strong loan loss coverage (with regulatory reserves) of 241% and healthy pre-provision earnings provide a solid buffer against potential asset quality stress from geopolitical uncertainties.  

For 1H FY Dec 2026, the Group recorded pre-tax profit of RM4.7 bil, up 1.3% y-o-y. Stronger unit trust-related fee income and foreign exchange gains offset higher impairment charges, increased personnel expenses and margin pressure amid intense competition for deposits and loans. The return on risk-weighted assets eased to an annualised 2.51% (FY Dec 2025: 2.66%) but remained healthy.



 

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

Wong Yin Ching, CFA
(603) 2708 8280   
yinching@ram.com.my

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