PETALING JAYA: Overall loan growth is projected to grow by 5.7% in 2026, supported by expansion of 5.8% in consumer lending and 5.5% in business loans, according to TA Research.
“For banks under our coverage, we forecast loan growth of 5.9%, led by smaller banks with stronger momentum of around 8%, while mid-sized institutions such as AMMB Holdings Bhd
, RHB Bank Bhd, and Hong Leong Bank Bhd (HLBB) are expected to expand by 6% to 7%.
“Larger banks are likely to post steadier growth in the 4% to 6% range.
“Domestic loans are expected to remain the primary driver of expansion.
“However, when factoring in overseas operations for banks with international exposure, we anticipate overall loan growth to ease slightly to 5.6%, driven by weaker contributions from foreign markets and potential currency translation headwinds from a stronger ringgit,” the research house said.
The research house said banks should also remain broadly optimistic about the small and medium enterprise (SME) segment, which continues to outpace system loan growth.
In October, total SME loans advanced 7.2% year-on-year, compared with overall sector growth of 5.4%.
Malaysia’s largest lender Malayan Banking Bhd (Maybank) has projected renewed SME capital expenditure cycles would support loan growth.
“Thus, we believe banks with established pipelines and specialised platforms targeting SMEs and high-growth niches are best positioned to capture this momentum,” it noted.
In 2026, the research house expects banks to continue making deliberate pivots toward high-yield and unsecured lending, with growth strategies increasingly centred on high-margin unsecured products as well as quality residential mortgages.
“These shifts reflect a broader effort to balance profitability with asset quality while positioning for resilient demand in consumer lending,” TA Research added.
“Efforts to safeguard net interest margins are particularly evident in the push for unsecured financing.
“This aligns with our projections of stronger growth in credit cards of 6.2%, personal loans (3.7%), and loans for securities purchases (7.4%) in 2026.”
Affin Bank Bhd has reiterated its commitment to a high-margin business strategy, and the research house expects it to sustain strong momentum in personal financing, building on the robust growth achieved in 2025.
HLBB, which delivered significant gains in unsecured lending during the first quarter of financial year 2026, is also well-positioned to maintain this trajectory into 2026.
With personal loans and credit card receivables driving performance, TA Research foresees HLBB’s focus on unsecured products would continue to underpin its consumer lending expansion.
Apart from this, the research house also expects banks to simultaneously reinforce their focus on secured growth through high-quality residential mortgages, particularly targeting financially resilient customer segments.
It also projects overall mortgage loans to grow by 6.2% in 2026.
It is maintaining its “overweight” stance on the banking sector, with CIMB Group Holdings Bhd, Maybank, and Alliance Bank Malaysia Bhd as its top recommendations.
