Private Non-financial Sector Credit Up By 5.5 Pct In January 2026 -- BNM

KUALA LUMPUR, Feb 27 (Bernama) -- Credit to the Malaysia’s private non-financial sector grew by 5.5 per cent in January 2026 against 5.4 per cent in December 2025, reflecting a higher growth in outstanding corporate bonds of 7.6 per cent versus the prior month’s 6.9 per cent, according to Bank Negara Malaysia (BNM).

In its Monthly Highlights for January 2026 released today, the central bank noted that growth in outstanding loans remained at five per cent, similar to December 2025.

Business loans expanded by four per cent (December 2025: 3.9 per cent), supported by higher growth for investment-related loans, particularly among non-small and medium enterprises (SMEs), it said. SME loan growth was broadly sustained.

Household loan growth remained stable at 5.6 per cent for both months amid steady loan growth across most purposes, it said.

BNM noted that banks’ capital position remained strong at 18.1 per cent in January 2026, enabling continued support for credit intermediation and providing buffers to absorb unexpected losses.

The banking system recorded excess capital buffers of RM139.6 billion as of January 2026, it said.

Gross and net impaired loans ratios remained stable at 1.4 per cent and 0.9 per cent, respectively, while the loan loss coverage ratio (including regulatory reserves) remained sufficient to cover loan losses, at 125.9 per cent of gross impaired loans versus 127.2 per cent in December 2025.

BNM said domestic and external developments affected the local financial markets while global financial markets were influenced by weaker sentiment towards the US dollar amid geopolitical and tariff uncertainties.

“These external developments, alongside positive sentiment towards Malaysia’s economic fundamentals and favourable economic outlook, supported foreign portfolio inflows into domestic markets,” it said.

Amid this backdrop, the ringgit appreciated by 2.9 per cent against the US dollar. The FBM KLCI rose by 3.6 per cent (regional average: 7.1 per cent).

Despite the higher net issuance of  Malaysian Government Securities (MGS) during the month, yields remained broadly stable, BNM said.

“Sustained demand from non-resident investors absorbed the additional supply, limiting the upward pressure on the 10-year MGS yield, which rose marginally by just one basis point (regional average: nine basis points),” it said.

January headline and core inflation were unchanged at 1.6 per cent and 2.3 per cent, respectively.

Higher inflation was observed in jewellery and watches, in line with higher prices of precious metals, while electricity prices declined at a slower pace following lower discounts related to generation costs.

“These effects were offset by lower inflation in petrol (RON97) and selected core Consumer Price Index services, including home maintenance and repair services and streaming services,” BNM stated.

-- BERNAMA

TAGS: BNM, January 2026 monthly highlight, non-financial sector, loans, MGS

SNAA SNAA TLC