KUALA LUMPUR (Oct 4): Fitch Ratings said it believes Malaysian banks with significant overseas operations like Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd generally manage their foreign currency funding and liquidity needs well as banks here shifted towards more stable funding structures in recent years.

Fitch said in a statement today Malaysian banks' more stable funding structures should reduce vulnerability to market disruptions.

"Most major Malaysian banks are unlikely to face difficulties in meeting net stable funding ratio (NSFR) requirements announced last week as part of Bank Negara Malaysia's (BNM) implementation of Basel III regulations.

"Banks will also need to report their NSFR by currency. There are no currency-specific NSFR requirements, but disclosure will help BNM monitor the stability of banks' funding sources by major currency exposure. Fitch believes that Malaysia's banking groups with significant overseas operations — such as Maybank and CIMB Group — generally manage their foreign currency funding and liquidity needs well," Fitch said.

According to BNM, the NSFR is a liquidity standard published by the Basel Committee for Banking Supervision which forms part of the Basel III regulatory reforms.

"The NSFR requires banking institutions to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities. This standard complements the Liquidity Coverage Ratio (LCR) which has been phased in since 2015," BNM said.