Central bank says financial institutions remain well capitalised even under scenarios more severe than the Global Financial Crisis and the Covid-19 pandemic.
BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH
KUALA LUMPUR, April 1 — Malaysia’s banking system remains resilient and capable of withstanding severe economic shocks, including scenarios more extreme than the Global Financial Crisis and the Covid-19 pandemic, Bank Negara Malaysia said.
Governor Dato’ Sri Abdul Rasheed Ghaffour said stress tests conducted by the central bank show that financial institutions maintain strong capital buffers and ample liquidity even under severe economic conditions.
The results indicate that banks’ aggregate capital ratios remain well above regulatory minimum levels, allowing them to absorb losses while continuing to provide financing to households and businesses.
“Banks have the buffers to absorb losses and, even in challenging conditions, they can continue lending and supporting financial intermediation,” Rasheed said.
The central bank also noted that the repayment capacity of households and businesses remains generally sound.
The share of risky and impaired loans remains low, while most borrowers continue to meet their debt obligations despite global economic uncertainty.
Credit growth continues to support the economy, with financing to the private sector expanding 5.4% in 2025, including 5.9% growth in SME financing.
BNM said the financial sector continues to play an important role in supporting economic growth by ensuring that credit continues to flow even during periods of uncertainty.
- TNS NEWS