Malaysian Banking Stocks Hit Record Highs on Solid Fundamentals
Strong loan growth, improving asset quality, and resilient corporate earnings are boosting investor confidence, pushing key banking stocks to new peaks.
On December 2, Malaysia’s largest bank stock, $MAYBANK (1155.MY)$ , rose more than 3% in a single day—a rare move—reaching RM10.28 per share and setting a fresh record. Other banking stocks also advanced amid broad optimism: $RHBBANK (1066.MY)$ climbed to RM7.24 per share, a new all-time high, while $CIMB (1023.MY)$ surged to an intraday high of RM8.05 before pulling back. This rally follows a series of financial reports that, though mixed, have largely reinforced perceptions of the sector’s underlying resilience.
Steady NIM and Robust Dividend Yields
A horizontal comparison of major banking stocks, $MAYBANK (1155.MY)$, $PBBANK (1295.MY)$, $CIMB (1023.MY)$, $RHBBANK (1066.MY)$, shows relatively diversified performance across the board. Overall, both revenue and profits delivered satisfactory results. In terms of key metrics, net interest margins (NIM) for these banks have generally stabilized around 2%, with the exception of RHBBANK.
Attractive dividend yields remain a key focus for investors and continue to provide a margin of safety. Notably, Maybank offers a dividend yield as high as 6%—the highest among the four—even after its share price reached new highs.
Looking ahead, Malaysia's economy is projected to grow by 4.5% in 2026, with overall market loan expansion expected to reach 5%. This suggests the banking sector may enter a more favorable operating cycle by 2026, supporting a recovery in profit growth. Such conditions would further underpin stable dividend distributions from banking stocks.
It is also worth noting that CIMB announced a special dividend of 7 sen per share this quarter, as part of its plan to return up to RM 2 billion in capital to shareholders by the end of 2027.
Impressive Industry Data
According to Kenanga Research, the banking system maintained steady momentum in October 2025, with year-on-year loan growth of 5.4%. This keeps the sector on track to meet the full-year 2025 target of approximately 5.5%. Growth was broad-based: business loans rose 0.6% month-on-month, driven by working capital needs in construction and retail, while household loans grew 0.5%, supported by residential mortgages and vehicle financing. A promising indicator was the 12% month-on-month rebound in total loan applications in October, despite a slight easing in approval rates. Furthermore, industry asset quality strengthened, with the gross impaired loans (GIL) ratio improving to 1.39% in October from 1.41% the previous month.
Consistent Growth Trajectory
The October strength is not an isolated event but part of a sustained positive trend. In September 2025, the sector recorded steady year-on-year loan growth of 5.5%. Business loan momentum was particularly robust, accelerating to 5.4% year-on-year from 5.2% in August, driven by investment-related loans from larger corporations. Growth in SME loans—which account for 19% of system loans—continued to outpace the industry at 8.1% year-on-year. The funding environment remained healthy, with system deposit growth accelerating to 5.2% year-on-year in September. Asset quality was stable, with the GIL ratio edging down to 1.41%, while strong capital and liquidity buffers provided solid downside support.
Economic Tailwinds
Strong banking activity aligns with encouraging signals from the broader Malaysian economy. The S&P Global Malaysia Manufacturing PMI rose to 50.1 in November 2025, moving into expansion territory for the first time after 17 consecutive months of contraction. This expansion was driven by the fastest pace of new order growth since April 2022 and the quickest rise in employment since September 2022. Business sentiment climbed to its highest level in over a decade, supported by new product launches, capacity expansions, and stronger customer demand. This improving economic backdrop, along with strong export performance, is expected to support continued industrial and credit growth, creating a favorable operating environment for banks.
Navigating the Road Ahead
Looking forward, the sector's trajectory will depend on balancing clear opportunities with persistent challenges. Analysts are optimistic about sustained loan growth, supported by seasonal year-end promotions and business expansion plans.
However, banks must navigate a prolonged NIM compression environment at least until the first half of 2026, as long-term deposits mature. The industry's loan-to-deposit ratio (LDR) has also inched up to 89.5%, indicating that funding growth needs to keep pace with lending. The performance of overseas operations—particularly in regional markets such as Indonesia for Maybank—remains a variable.
Despite these headwinds, the consensus is that strong fundamentals will prevail. Kenanga Research's "OVERWEIGHT" call reflects confidence in the sector's resilient earnings and stable domestic operations. Prudent risk management, solid capital buffers (with CET-1 ratios for major banks around a healthy 15%), and an improving macroeconomic landscape suggest that the current rally in Malaysian banking stocks rests on a firm and sustainable foundation.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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spyxapyl8112 : public bank bila u nak break rm5?
PJ Guy : Dont buy. Valuation too high already.
103345009 : Higher starting next year
Sean23 : why $CIMB (1023.MY)$ stop stacking ? no gas edy ?
Slay2dudes : ok
105519237 : teh family came in throw lor
104796853 : The boy who cried wolf
Francisssss : You analysts claimed that interest rate cuts mid-year would negatively impact banks' revenues, making bank stocks unattractive. Now that bank stocks are rising, you're jumping on the bandwagon. Stop writing justifications after the fact.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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小平凡 spyxapyl8112 : PBBank is unlikely to rise at present because the company is selling its shares. Once the shares in hand are sold, it may surge. PBBank is the best banking stock in Malaysia. If you have money, accumulate some. It will not rise in the short term but is the best choice in the long run given its low price.