Malaysian banks’ sector earnings on track for growth in 2025

Loan growth was stable in September, although household loan growth was slightly slower.

Malaysian banks’ loan growth is on track to meet forecasts, whilst sector earnings are expected to log a resilient 3% growth in 2025, according to a report by UOB Kay Hian.

Loan growth remained stable at 5.5% in September, extending the 5.4% growth in August. Business loans rose to 5.5%, whilst household loans also expanded by 5.5% albeit slower than the 5.7% growth in August.

“We maintain our 2025 loan growth forecast at 5-6%,” said UOB Kay Hian analyst Keith Wee Teck Keong in an update report published in November. “For 2026, we project a 5%-5.5% growth amidst bank’ margin discipline.”

Sector earnings are expected to grow 3% in 2025, and 5% in 2026.

“Earnings resilience is underpinned by an around 5% loan growth, stable credit costs, manageable NIM pressure, and potential non-interest income upside,” Wee said.