Malaysia's banking system is expected to continue to remain strong and resilient on the back of a stronger capital base, further improvement in asset quality and robust loan activity to small- and medium-sized enterprises (SMEs), says Public Bank Bhd.
Public Bank Economic Review, a bi-monthly published by the bank's economic division, said the increased strength of the banking system was because of several reasons, including the success of the extensive reforms and measures pursued by Bank Negara Malaysia after the fallout from the Asian financial crisis in 1997/98.
Secondly, it was due to the sustained improvement in the domestic economy that had allowed the banking institutions to resume their normal operations and generate higher earning capacity.
The review noted that during the post-crisis period (1999-2003), the Malaysian economy had been growing by a compounding rate of 4.5 per cent per year, helped by growth in domestic and external demand.
