Banking system well-capitalised, reports steady profit amidst competition

The nation's banking system remains well-capitalised.

As at end August 2015, 3 main indicators -- the common equity tier 1 (CET1), tier 1 capital ratio and total capital ratio -- stood at 12.1 percent, 12.7 percent and 14.8 percent, respectively.

These are well above the minimum regulatory levels and exceed the rates in end August 2014 of 12.8 percent, 13.6 percent and 15.5. percent, respectively.

Similarly, liquidity in the banking system remained ample.

As at end August 2015, the bank's surplus liquidity placed with the central bank exceeds RM110 billion.

In the same period, the banking system recorded a slightly lower pre-tax profit of RM19.7 billion compared to RM21.7 billion the same time span in 2014.

The banking system reports steady profit despite competition and pressures especially in the retail financing market.

Additionally, profitability was also supported by revenue from other fee-based activities, such as investment banking and payment-related services.

At the present moment, there are 29 locally incorporated foreign banks operating in Malaysia out of a total of 58 banking institutions which include commercial banks, investment banks as well as Islamic banks.

At the same time, the Islamic banking industry has showcased significant growth since the last five years.

As at end August 2015, the total assets of the Islamic banking system grew 13.7 percent to RM672.6 billion while total deposits of the Islamic banking system increased by 6.6 percent to RM497.1 billion.