Malaysian banks earnings to grow 3% in 2025 on stable interest rate metrics

The sector’s loan growth was 5.4% in 2025.

Malaysia’s banking sector is expected to report earnings growth of 3%, underpinned by a loan growth of around 5% in 2025 as well as stable interest-related metrics, according to UOB Kay Hian (UOBKH).

The sector’s loan growth was 5.4% in August 2025, with asset quality improving.

Earnings resilience is underpinned by loan growth, stable credit costs, manageable net interest margin (NIM) pressure, and potential non-interest income upside.

“We remain constructive on the sector. Valuations remain appealing, with the sector trading at P/B of 1.10x and offering an attractive dividend yield of 6% for 2025 (and 6.5% for 2026),” said UOBKH analyst Keith Wee Teck Keong in a 1 October 2025 report.