AmBank (AMMMK)

AmBank’s current senior credit is stable as an investment-grade bank credit. FY26 record PATMI, 10% ROE, NIM improvement, deposit growth, CET1 of 14.82%, TCR of 17.23%, and LCR above 135% support short-term repayment capacity, refinancing capacity and market access. The credit direction is broadly stable to modestly improving, but the pace of improvement is gradual, and it is not yet time to upgrade the view further without confirming Business Banking and Retail asset quality. The probability of rapid credit deterioration is not currently high, but if SME overlay, Retail GIL, LLC decline, NIM compression and capital returns deteriorate at the same time, the view should be reassessed first for subordinated capital instruments.

This credit profile is supported by the domestic banking deposit and lending franchise, FY26 earnings absorption capacity, capital and liquidity buffers, and the complementary strength of Wholesale Banking and Islamic Banking. In FY26, group-level net impairment charge declined and PBP increased, allowing the group to absorb higher provisions in Business Banking. This is clearly positive for senior credit.

At the same time, constraints remain in the details of asset quality. Business Banking SME overlay and Commercial Banking individual provisions, the rise in Retail GIL, and the decline in the LLC ratio are issues that are not eliminated by strong headline results alone. Because disclosure granularity is limited, this report does not conclude at this stage that there is structural deterioration, but if the same direction continues in FY27, a more cautious view than simple credit cost normalisation will be required.