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Malaysia: Outlook remains stable amid sustained economic recovery, robust credit metrics

Our outlook for Malaysia's banking system remains stable, underpinned by strong economic growth and robust credit metrics across the system. While weakening exports will weigh on Malaysia's economic growth, strong domestic demand will support it as the country's labor conditions improve and inflation will remain lower than regional peers. Banks' ample loan-loss buffers and the on-going forbearance measures will mitigate asset risks from weak borrowers. Meanwhile, stable net interest margins (NIMs) and loan-loss provisions will help keep banks' pretax profitability....

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