{
  "id": 17727584,
  "title": "Malaysia banks ride investment-led growth, but deposit war threatens margins",
  "url": "https://urgent.news/2026/11/02/malaysia-banks-ride-investment-led-growth-but-deposit-war-threatens",
  "topic": "world",
  "section": "World",
  "published": "2026-11-02T02:24:31.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/corporate/2026/11/1568809/malaysia-banks-ride-investment-led-growth-deposit-war-threatens"
  },
  "original_language": "en",
  "account": "Malaysia's banking sector is experiencing robust growth driven by resilient credit demand and an investment-led economic upturn, but intense competition in the deposit market could impact banks' net interest margins (NIM), according to recent research from PublicInvest and CIMB Securities. PublicInvest Research maintains an \"Overweight\" rating, citing strong loan growth and solid fundamentals, while CIMB Securities sees a \"Neutral\" stance due to limited upside from current valuations. Hong Leong Investment Bank (HLIB) Research keeps a \"Neutral\" rating but warns of potential challenges ahead. Loan growth in Malaysia's banking sector increased by 6.1% year-on-year in September 2026, with business loans expanding notably. However, deposit growth has been lagging, which could fuel more intense competition for funding among banks. System-wide deposit growth in September reached 3.7% year-on-year, slightly lower than in August's 4.2%. Despite a slight improvement in the lending spread, which reached 2.35% in September, banks may face heightened pressure on funding costs due to more competitive deposit rates. While asset quality remains a positive for the sector, with the gross impaired loan ratio improving to 1.42% in September, PublicInvest highlights concerns over rising household loan defaults amid high living costs. Research firms have recommended specific stocks, with PublicInvest and CIMB Securities favoring Maybank, CIMB Group, AMMB Holdings, Public Bank, RHB Bank, and Hong Leong Bank. In contrast, HLIB Research recommends Public Bank for its defensive position and stable asset quality.",
  "summary": "KUALA LUMPUR: Malaysia's banking sector is expected to remain supported by resilient credit demand and an investment-led economic upcycle, although intensifying deposit competition could continue to weigh on banks' net interest margins (NIM).",
  "key_points": [
    "Malaysia's banking sector grows 6.1% YoY in loans, driven by investment demand",
    "Deposit growth slows to 3.7% YoY in September, intensifying funding competition",
    "Asset quality improves, but household loan defaults rise amid high living costs"
  ],
  "editors_take": "Rising competition for funding threatens to squeeze profitability even as strong business loan demand and improving asset quality support the broader growth trajectory of Malaysia's banking sector.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}