Banking

Malaysia’s banking sector is well-capitalised and stable, with larger financial institutions now looking at overseas expansion to increase their clout. The regulators’ encouragement of consolidation under the Financial Sector Master Plan, which ended in 2010, reduced the number of banks from around 20 down to 8 major institutions. These have high capital-adequacy ratios and low ratios of non-performing loans, even as they extend a volume of credit equal to 132% of the Malaysia’s GDP. While future mergers could still occur, the larger trend is outward growth, as Malaysian institutions look to the under-banked populations of Indonesia, the Philippines, and Thailand. This chapter includes interviews with Zeti Akhtar Aziz, Governor of Bank Negara Malaysia; and Nazir Razak, CEO, CIMB Group Holdings.