Malaysia’s Islamic Banking Sector Grows 8.1%; RAM Maintains Stable Outlook

Despite COVID-19 and the many challenges it brought, Malaysia’s Islamic banking sector posted a growth of 8.1% in financing in 2020. This stands tall in comparison to a mere 1% in growth that conventional banks saw in 2020. Given this, RAM Rating Services (RAM) has maintained its Stable outlook on the Islamic banking sector in Malaysia.

Why it Matters?

RAM stated that the credit growth of the overall banking system in Malaysia was continually advanced by Islamic financing, mainly on the back of the “Islamic First” agenda that several major banking groups have undertaken. It also noted that the Islamic banking system remains highly liquid, with the liquidity coverage ratio at around 129% as at end-January 2021. For 2021, RAM forecast...