Moody’s: Retail Financing, Stable Liquidity and Funding Keep Malaysian Islamic Banks Resilient During COVID-19

Moody’s Investors Services (Moody’s) has stated that concentration on retail financing, along with stable liquidity and funding profiles will support Malaysian Islamic banks and allow them to emerge resilient in the wake of the on-going COVID-19 pandemic.

The seven largest Islamic banks in Malaysia (including five that are subsidiaries of domestic banking groups with conventional operations) all have a large exposure to retail financing, which according to Moody’s is less vulnerable than business financing in times of economic downturn.

Moody’s analyst, Tengfu Li, notes that although increasing unemployment and deteriorating economic growth will lead to an i...