Banks in Malaysia Taking Proactive Measures by Increasing Provisioning: RAM Ratings

Following heavier impairments reported in the first quarter of 2020, domestic banks in Malaysia are allocating higher provisioning amidst the volatile environment caused by COVID-19. According to RAM Ratings (RAM), the domestic banks are preparing for a possible increase in loan delinquencies, following the expiry of the six-month moratorium period on individual and Small Medium Enterprises (SME) loans.

According to Wong Yin Ching, RAM’s Co-Head of Financial Institution Ratings, asset quality within the domestic banking system remains robust, with a gross impaired loan ratio (GIL) of 1.55% at the end of May 2020, as against 1.51% at the end of 2019. With RAM expecting the GIL ratio to stay below 1.7% for 2020, troubled loa...