KUALA LUMPUR, Aug 30 — Banks continue to set aside additional provisions against potential credit losses, which currently stand at 1.9 per cent of total banking system loans.

Bank Negara Malaysia (BNM) in its monthly highlights — July 2021 report, said overall gross impaired loans ratio increased marginally to 1.7 per cent (June 2021: 1.6 per cent), driven by the household segment.

"Banks continue to facilitate repayment assistance for viable borrowers facing temporary financial difficulties amid credit risk outlook that remains challenging,” the central bank said.

Meanwhile, banking system liquidity position remained supportive of financial intermediation, it said.

The banking system continued to maintain healthy liquidity buffers with the liquidity coverage ratio (LCR) remaining strong in July (June 2021: 149.1 per cent).

"Banks’ funding profile remained stable amid sustained growth in deposits as individuals, businesses and non-bank financial institutions continue to maintain precautionary cash buffers,” BNM added. — Bernama