Bank Negara Malaysia (BNM) has released its Financial Stability Review for the first half of 2025, concluding that households and businesses continue to show healthy debt-repayment capacity and that financial institutions remain resilient, supported by robust capital positions and ample liquidity buffers. Domestic financial markets were assessed as orderly despite heightened global volatility, while operational resilience and fraud prevention were flagged as key ongoing priorities. The Financial Market Stress Index peaked in May and then moderated across asset classes, and the ringgit appreciated 6.1% against the US dollar between March and September 2025. Business resilience was supported by domestic demand, with profitability constrained by cost pressures; the median interest coverage ratio stood at 6.2 times and the share of firms-at-risk remained stable at 24.4%, while the business loan impairment ratio was unchanged at 3.1%. For small and medium enterprises, loans under repayment assistance declined to 4.1% of total SME loans (0.7% of total loans across the banking system and development financial institutions). Household debt-to-GDP edged up to 84.8%, with the median debt service ratio at 41% for newly approved loans and 33% for outstanding loans; the household loan impairment ratio was unchanged at 1.1%. As of end-June 2025, the banking system’s total capital ratio was 18.2% with excess capital buffers of RM138.9 billion, while the insurance and takaful sector recorded an aggregate capital adequacy ratio of 223% with excess buffers of RM42 billion; RENTAS and major retail payment systems maintained high availability with no major operational or cyber incidents reported. BNM noted a shift in fraud risks towards authorised scams using social engineering and referenced strengthened fraud detection and public awareness initiatives, including an ongoing upgrade of the National Fraud Portal. As cross-border QR payment connectivity expands, BNM plans to further strengthen oversight of cross-border payment arrangements in collaboration with relevant regulatory authorities.

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