Malaysian banks keep impaired loan ratios low as capital stays strong

Borrowers' repayment capacity continued to be sustained, the central bank said.

Malaysian banks’ gross and net impaired loan ratios remained low at the end of July 2025, whilst capital remained strong, according to data from the central bank.

Gross impaired loans ratio was 1.4%, whilst net impaired loans is at 0.9%, said the Bank Negara Malaysia (BNM). Borrowers’ repayment capacity continued to be sustained, it said.

Capital remains “strong” at 18.4%, the BNM said, ensuring continued support to credit intermediation and the ability to withstand potential shocks in the economy.

The banking system recorded excess capital buffers— or total capital above the regulatory minimum— of $33.96b (MYR143.3b) as of July 2025.

(US$1 = MYR4.23; as of 4 September 2025)