Malaysia’s Islamic Banking Industry Could See Slower Financing Growth In the Event of A Prolonged COVID-19 Outbreak

President of the Association of Islamic Banking and Financial Institutions Malaysia (AIBFIM), Datuk Adissadikin Ali highlighted that the overall banking sector could experience slower financing growth led by lower economic growth due to Covid-19 and lower oil prices.

He noted that banks had announced relief measures to ease any negative pressure on asset quality and profitability in the near-term and added that stable credit profiles along with sufficient loss absorption buffers of Islamic banks would provide additional support.

However, he highlighted that the Islamic banking industry together with the Malaysian economy would likely be affected by the duration and spread of the COVID-19 outbreak as well as the government policy responses.

The President mentioned...