Malaysia's corporate lending slumps to 3.8% as 24-month credit gains unwind

Total credit, including bonds, still accelerated to 5.5% year on year by the end of January 2026.

Malaysia’s bank loans in January eased to 4.7% year-on-year (YoY), whilst household loan growth remained steady at 5.3% YoY, according to a Maybank IBG Research report.

In contrast, non-household loan growth slowed to 3.8% year-on-year at end-January 2026, down from 4.1% at end-2025. 

Mortgage lending grew 5.8% year-on-year at end-January 2026, compared with 6.0% at end-2025. 

Passenger car financing increased 7.2% year-on-year, slightly higher than 7.1% previously. Non-residential property financing grew 4.8% year-on-year, up from 4.5% at end-December 2025.

Personal financing growth was 1.0% year-on-year at end-January 2026, whilst credit card financing expanded 6.2% year-on-year.

Total credit, which includes both bank loans and corporate bonds, expanded at a faster pace of 5.5% year-on-year at end-January 2026, compared with 5.3% at end-December 2025.

Lending to small and medium-sized enterprises (SMEs) rose 5.7% year-on-year, easing slightly from 5.9% at end-December 2025.

Outstanding corporate bonds issued by the private non-financial sector stood at MYR636.9b at end-January 2026. 

When combined with industry loans, total credit to the private non-financial sector grew 5.5% year-on-year.

Deposit growth moderated to 4.0% year-on-year at end-January 2026 from 4.5% at end-December 2025. 

However, current account and savings account (CASA) balances increased 8.0% year-on-year, up from 7.3% previously.

The decline in absolute gross impaired loans (GILs) on a year-on-year basis has ended after 24 months. The industry’s GIL ratio rose slightly to 1.4% in January 2026 from a low of 1.37% at end-2025.

Segments that recorded double-digit increases in impaired loans included passenger vehicles, up 19% year-on-year; residential properties priced below MYR250,000, up 34%; commercial complexes, up 18%; and industrial buildings and factories, up 16%.

The SME GIL ratio remained stable within the 3.5% to 3.8% range over the past two years and stood at 3.6% in January 2026. On an absolute basis, SME GILs rose 7.4% year-on-year.

The 2026 industry loan growth forecast remains at 5.0%, with a positive stance maintained on the sector.