MARC Ratings has upgraded China Construction Bank (Malaysia) Berhad’s (CCBM) long-term financial institution (FI) rating to AAA from AA+ with a stable outlook, and affirmed its short-term FI rating at MARC-1.

CCBM’s long-term FI rating of AAA has been equalised with the AAA FI rating of its parent, China Construction Bank Corporation (CCB), based on publicly available information. The rating upgrade reflects MARC Ratings’ strengthened assessment of parental support, underpinned by CCBM’s nearly decade-long presence in Malaysia, its strategic role in facilitating CCB’s cross-border business, particularly through activities related to the Belt and Road Initiative and Chinese enterprise banking, and its growing significance within the group. CCB’s explicit commitment to maintain full ownership and provide ongoing support reinforces MARC Ratings’ expectation of a very high likelihood of extraordinary support, if required. CCBM also benefits from close operational integration with the group through shared branding, systems, resources and customer networks, as well as access to experienced personnel. Support is further evidenced by CCB’s continued provision of capital, funding and liquidity, including an outstanding subordinated intragroup loan of RM834.9 million as at end-2025. This assessment is further supported by CCB’s strong credit profile, underpinned by majority Chinese government ownership, close state linkages and its designation as a global systemically important bank. As at end-2025, CCB was the world’s third-largest bank by assets, with total assets of USD6.5 trillion.

CCBM’s loan book expanded by 19.1% to RM3.2 billion in 2025, driven primarily by financing related to the East Coast Rail Link project. While economic headwinds may moderate lending growth over the near to medium term, the bank remains well positioned to support business expansion, supported by a strong total capital ratio of 48.3% as at end-2025. The capital profile is, however, moderated by borrower concentration risk, with the top five borrowers accounting for 57% of total loans.

Profitability improved in 2025, with pre-tax profit increasing 29.7% to RM59.0 million, aided by lower funding costs following the refinancing of a USD-denominated subordinated loan with lower-cost renminbi funding. Consequently, net interest margin widened to 0.92% from 0.39%, while pre-tax return on assets increased to 0.64% from 0.55%. Liquidity also remained strong, with Basel III liquidity coverage and net stable funding ratios of 170.1% and 155.8%, respectively, as at end-2025, comfortably above regulatory requirements.