In its latest Malaysian Islamic Banks Monitor: 2026, Fitch noted that Islamic banking assets grew at a faster pace than conventional banking, reinforcing the sector’s rising importance within Malaysia’s financial system. Islamic banking assets expanded by 7% to US$312bil by end-2025, outpacing the 4% growth recorded by conventional banking assets. The expansion lifted Islamic financing to approximately 44% of total system loans and financing, up from 43% in 2024. The household segment remains the main driver of Islamic financing growth, with about 64% of Islamic financing extended to households, compared with 57% for conventional banks. Six major Islamic banks that are subsidiaries of local banking groups, together with Bank Islam Malaysia Bhd , account for roughly 76% to 77% of total Islamic banking assets and financing.

Source: The Star February 05, 2026 10:05 UTC