Business demand drives 5.7% Malaysian credit rise

SME loan growth, mortgages, hire-purchase, and credit cards moderated in August.

Malaysian banks’ loan growth strengthened in August 2026, logging a 5.7% growth year-on-year (YoY) from 5.6% the previous month, lifted by business loans, according to data from the Bank Negara Malaysia (BNM).

Business loans rose 6.8% YoY in August from 6.4% in July, whilst household loan growth eased to 5% YoY from 5.1% in July, central bank data showed.

Working capital growth rose to 5.3% YoY.

Loans to small and medium enterprises (SMEs) rose by 3.8% YoY in August, slowing from the 4.5% YoY loan growth in July. Mortgage, hire-purchase, and credit card growth all moderated, according to UOB Kay Hian (UOBKH).

In contrast, total deposit growth slowed to 5.2% YoY in August, from 5.6% YoY in July, the BNM said.

Amongst lenders, Hong Leong Bank is UOBKH’s top pick, with analysts noting its defensive earnings profiles and near-term capital management upside following the adoption of Basel III reforms last June.

UOBKH analysts also noted CIMB, saying that it is likely to recover the fastest once geopolitical tensions in the Middle East ease.