KUALA LUMPUR, Aug. 6 (Xinhua) -- Malaysia's six largest banks are expected to maintain resilient credit profiles despite slower economic growth in 2026, supported by stable operating conditions, sound asset quality, sustained profitability and adequate capital buffers, Fitch Ratings said on Wednesday.
The ratings agency said in a note that Malaysia's economic growth is likely to moderate this year, but resilient domestic demand and stable inflation should continue to underpin the banking sector.
Asset quality is expected to remain broadly stable, with non-performing loan ratios staying low, Stage 2 loans improving and credit costs remaining below historical averages.
Profitability is also likely to remain resilient despite pressure on net interest margins from a lower interest-rate environment and continued competition for deposits. Fitch said banks' strong deposit franchises and active balance sheet management should help cushion the impact.
According to Fitch, most rated Malaysian banks carry Stable outlooks. The agency added that Malaysian banks' ratings remain supported by adequate capital buffers, although a significant deterioration in risk profiles, asset quality or capitalization could result in downward rating pressure. ■