Malaysia’s Banking Sector Growth for 2021 to be Fuelled by Islamic Banks: S&P Global Ratings 

Loan growth in Malaysia’s Islamic banking sector is anticipated to double to at least 10-12% year-on-year (YoY) in 2021, surpassing the expected Malaysian banking sector loan growth which is forecast at 6% YoY for 2021, up from 3.4% in 2020. Overall banking sector growth in Malaysia is expected to be predominantly led by Islamic banks, which have been growing at a strong pace in the past decade, according to S&P Global Ratings.

Why it Matters?

Financing growth for Islamic banks is to be led by household credit, such as mortgages and hire purchase credit, and will less likely come from personal loans and credit cards in 2021. With the Islamic banks in Malaysia having a larger share of exposure to households and micro, small and medium enterp...