KUALA LUMPUR: The loss-absorbing capacity of banks in the country remains strong, with excess capital buffers of RM131.9bil as of January 2022, according to Bank Negara.

       The central bank said banks remained well capitalised to withstand potential stress and could continue to support credit flows to the economy.

       “Capital ratios rose slightly in January 2022 due to recognition of year-end profits.

       “This was partially offset by valuation adjustments on available-for-sale financial instruments,” it said in its monthly highlight report yesterday.

       According to the central bank, the resilience of banks continued to be underpinned by sound asset quality, where overall gross and net impaired loans ratios remained broadly stable at 1.4% and 0.9%, respectively.

       “Banks continue to set aside additional provisions against potential credit losses.

       “Total provisions currently stand at 1.9% of total banking system loans, and 130.5% of impaired loans,” the central bank pointed out. — Bernama