KUALA LUMPUR (Feb 7): Public Bank Bhd and Hong Leong Bank Bhd "will benefit the most" from slower Malaysian household loan growth due to slower consumer debt accumulation, Moody's Investors Service said.

According to Moody's senior analyst Simon Chen, the slowdown in the nation's household loan growth in 2016 from 2015 was credit positive for the asset quality of the country's banks.

"Among the Malaysian banks rated by Moody's, Public Bank Bhd (A3 stable, a3) and Hong Leong Bank Bhd (A3 stable, baa1), the banks with the largest exposure to the household sector, will benefit the most from further improvements in the leverage profile of households," Chen said in a statement today.

He said, "The continued deceleration of household loan growth will help stabilise the high household leverage situation in Malaysia, which is among the highest in Asia, and we expect that household debt to GDP for 2016 will moderate from the 89% recorded at end-2015."

Moody's statement is in conjunction with its Malaysian banking sector report, Continued slowing of household loan growth is credit positive for Malaysian banks. The report follows banking updates by Bank Negara Malaysia on Jan 31, 2017.