KUALA LUMPUR (March 31, 2026) – The Malaysian banking system remains resilient and well-capitalised, with sufficient buffers to withstand a severe global recession and financial market shock, according to the latest stress test results published by Bank Negara Malaysia (BNM). The central bank's Financial Stability Review for the second half of 2025, released on March 31, 2026, details the findings.
The adverse scenario tested was more severe than the 2008 global financial crisis, incorporating a sharp global recession, significant declines in asset prices, and heightened market volatility. Despite these extreme assumptions, the aggregate Common Equity Tier 1 (CET1) capital ratio of the banking system remained above the minimum regulatory requirement throughout the three-year horizon of the test.
BNM Governor Datuk Abdul Rasheed Ghaffour stated that the results affirm the strength of the financial system's buffers. "The banking system is well-positioned to continue supporting economic activity even under severe stress conditions," he said in the review. The central bank noted that banks have proactively managed their risks and built strong capital and liquidity positions over the years.
The stress test assessed the resilience of major domestic banking groups. BNM confirmed that all institutions maintained capital ratios above the regulatory minima under the severe scenario, though some moderation in profitability was observed due to higher credit impairments. The central bank will continue its close monitoring to ensure ongoing stability.
