Malaysian banks’ earnings growth to moderate from slower NII growth

Loan growth is expected to recover thanks to more business loans.

Malaysian banks’ earnings are expected to moderate in 2025 on the back of slower non-interest income growth from a high 2024 base.

For 2025, growth is expected to ease to 7%, from 8% in the first nine months of 2024, according to a report by UOB Kay Hian.

Net interest margin (NIM) is expected to remain stable, whilst loan growth will rebound, said analyst Keith Wee Teck Keong. This should offset the slower NII growth.

NIM is expected to recover 3 basis points (bp) for 2025, following the 2bp rise in 2024. Recovery is limited due to loan competition pressuring lending yield, particularly in mortgages, and the gradual normalisation of CASA ratios towards pre-pandemic levels of 26% from the current 29%.

UOBKH also projects a relatively high-interest rate differential of 25 bp for 2025, which will likely keep fixed deposit competition elevated despite a dovish US interest rate outlook.

Loan growth, on the other hand, is expected to get stronger with the uptick in business loans. Business loan growth is projected to be between 6% to 6.5% in 2025, compared to the 4.6% growth recorded in the first nine months of 2024.

Also Read

Malaysian private sector loans rose by 5.4% in Nov

RBI lifts lending restrictions of Arohan Financial Services Limited, Kolkata

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit