Banks expected to remain resilient amid mounting 2H pressures

CIMB Research said the key test for 2H26 would be whether banks can translate healthy balance-sheet growth into stronger returns without compromising funding discipline or asset quality.

PETALING JAYA: The local banking sector is expected to remain resilient in the second half of financial year 2026 (2H26) despite a more challenging operating environment, with higher-for-longer global interest rates, market volatility and tighter domestic funding conditions likely to keep pressure on margins, says CIMB Research.

The research house said banks entered 2H26 from a position of strength, with defensive earnings, resilient asset quality and strong capital, liquidity and loan-loss buffers supporting the sector.