Malaysian bank loan growth to stabilise at 4.5% to 5.5% in 2026

The 2025 slowdown to 4.8% seen as normalisation after 2024’s 5.5% expansion.

Malaysia’s banking sector is expected to see steady loan growth in 2026, following a slight slowdown in 2025, according to CGS International Securities.

Looking ahead, the brokerage added, “We expect banks’ loan growth to be stable in 2026, with a projected growth rate of between 4.5% and 5.5% on the back of our GDP growth forecast of 4.6%. We estimate household loans will expand 5.0% to 5.5% and business loans 4.0% to 5.0%,”

Last year Malaysian banks recorded a loan growth of 4.8% in 2025, down from the 5.5% in 2024.

On this, CGS International said, “We are not overly concerned about the slower loan growth in 2025 as this is in line with normalised growth of circa 5%.”

CGS also noted that lending trends differ by segment: household loans are expected to see slightly faster growth than business loans, reflecting steady consumer demand.

Meanwhile, overall credit conditions remain supported by healthy capital buffers, ample liquidity, and stable interest rate expectations.