KUALA LUMPUR: Malaysian banks wrapped up 2025 on a solid footing as six listed banks ended their financial year 2025 with a combined net profit of RM30.06 billion.
This underscores the sector’s resilience despite moderating loan growth.
The results, released between Feb 25 and Feb 27, showed that banks maintained strong profitability and continued to reward shareholders with generous dividends.
Analysts said the performance reflects the sector’s ability to sustain earnings momentum, supported by resilient asset quality and a still-supportive domestic economy.
While credit expansion has begun to ease, lenders have largely kept their earnings engines running, reinforcing the sector’s reputation among investors as a source of stability and steady income.
Tradeview Capital fund manager Neoh Jia Man said banking was among the top-performing segments on Bursa Malaysia last year, with the Bursa Malaysia Finance Index gaining 2.8 per cent.
He said the rally in banking stocks was underpinned by improving profitability, stable economic conditions and continued lending activity across key segments of the economy.
“Despite a meaningful rerating in recent months, there could still be some upside left in the tank,” he told Business Times.
The six banks with the combined RM30.06 billion are Malayan Banking Bhd (Maybank), CIMB Group Holdings Bhd, RHB Bank Bhd, Bank Islam Malaysia Bhd, Public Bank Bhd and Affin Bank Bhd.
The remainder, Alliance Bank Malaysia Bhd and AMMB Holdings Bhd will end their current year end on March 31, 2026, while Hong Leong Bank Bhd and Hong Leong Financial Group Bhd on June 30, 2026.
Collectively, they reported a net profit of RM10.28 billion for their latest quarter.
Neoh said a potential return of foreign capital flows, expectations of a US Federal Reserve rate cut and moderating government bond yields could continue to lend support to banking stocks.
Lower bond yields tend to make dividend-paying counters more attractive relative to fixed-income instruments, reinforcing the sector’s appeal among income-focused investors.
Still, the road ahead may not be entirely smooth.
Neoh said a sharper-than-expected economic slowdown could weigh on loan demand and asset quality, while the gradual rise of digital banks could intensify competition and chip away at margins and fee income.
“Any unexpected shift in the US Federal Reserve’s monetary policy could also influence foreign capital flows and investor sentiment toward the sector,” he said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said banks had weathered the shifting credit cycle reasonably well so far.
Loan growth continued to expand in 2025, albeit at a slower pace of 4.8 per cent, while asset quality remained sound.
Return on equity on a net profit basis improved to 10.2 per cent in the fourth quarter of 2025 from 9.3 per cent a year earlier.
Afzanizam said declining bond yields during the year likely helped banks book respectable gains in their marketable securities portfolios, as bond prices move inversely to yields.
He expects the sector’s outlook to remain broadly constructive.
The outlook is supported by expectations that Malaysia’s gross domestic product growth target of 4.0 to 4.5 per cent could be revised upwards, while the overnight policy rate is likely to remain unchanged, helping banks preserve their net interest margins.
“However, external risks, particularly unresolved tariff issues, could weigh on sentiment and prompt banks to remain cautious in credit underwriting.”
Maybank, the country’s largest bank, remained the industry heavyweight with FY25 net profit of RM10.51 billion on revenue of RM66.37 billion, alongside a total dividend of 63 sen per share.
CIMB followed with net profit of RM7.86 billion on revenue of RM22.47 billion, while Public posted RM7.22 billion in net profit on RM29.51 billion in revenue.
RHB, meanwhile, recorded a net profit of RM3.36 billion with revenue of RM17.92 billion and a dividend of 50 sen per share.
Hong Leong stood out on shareholder returns, declaring the highest dividend among its peers at 96 sen per share after reporting net profit of RM4.27 billion for the year.
AMMB registered RM2 billion in net profit on revenue of RM4.93 billion and declared a dividend of 30.2 sen per share, while Affin reported net profit of RM540.19 million, up from RM509.70 million previously, with revenue rising to RM2.44 billion.
The bank proposed a final dividend of 8.53 sen per share.
Bank Islam was the only lender to see earnings slip slightly, with net profit easing to RM557.24 million from RM571.08 million despite higher revenue.
The bank declared a dividend of 14.45 sen per share.
For investors, the sector’s performance suggests that while loan growth may be losing some momentum, Malaysian banks still have enough in the tank to remain reliable dividend plays, at least for now.
© New Straits Times Press (M) Bhd
