S&P: Malaysian Banks in Strong Position to Face COVID-19 Crisis

Banks in Malaysia are in a position of strength in facing the COVID-19 crisis, and are considered to be faring better than their regional counterparts, according to S&P Global Ratings (S&P).

Nancy Duan, Associate, Financial Institutions Ratings of S&P, stated that the robust position of Malaysia’s banks was based on the country’s Common Equity Tier 1 ratio, which stood at a sturdy 14%, and gross non-performing loan (NPL) at 1.5%, which was the lowest in the region, as at December 2019. Speaking at a recent webinar, Duan highlighted that a consistent annual compression in the net interest margin (NIM) of Malaysian banks by 5 to 10 basis points (bps) over the past decade would weaken the banks’ earnings retention ability, amidst COVID-19. She added th...