PETALING JAYA — Malaysia’s banking sector is expected to maintain stable loan growth of around five per cent in 2026, with business lending emerging as a key driver amid a moderate economic outlook.
Maybank Investment Bank Securities said industry loan growth has shown signs of easing towards the end of 2025, reflecting a more cautious lending environment. While year-on-year growth stood at 5.2 per cent in November, the annualised pace slowed to 4.8 per cent.
The research house expects loan growth to close 2025 at about five per cent and remain at a similar level in 2026, broadly in line with the country’s projected GDP growth of 4.5 per cent.
According to Maybank IB, household loan growth is likely to stay moderate, placing greater emphasis on a recovery in business lending to sustain overall expansion.
Despite slower momentum, the banking sector continues to benefit from resilient asset quality and steady domestic demand. However, intense competition for deposits is expected to keep funding costs elevated and weigh on net interest margins.
As a result, banks are likely to adopt a more cautious and quality-focused approach to loan growth.
Maybank IB remains constructive on the sector and continues to favour CIMB Group, AMMB Holdings and Alliance Bank, citing their strong fundamentals and ability to navigate funding cost challenges.