The financial health of the Maldives’ banking sector is projected to deteriorate significantly this year, according to detailed accounts released by the Maldives Monetary Authority (MMA).

The MMA’s report indicates that the capital adequacy of banks—a measure of their financial strength—has increased this year. The required reserve or “capital adequacy ratio” needed for banks to safely manage potential losses has been set at a higher threshold. As of November 2025, this ratio stands at 45.0 percent, which is considered a very high and secure figure by international standards.

Furthermore, the volume of non-performing loans that banks have been unable to recover has also risen sharply this year. As of November, the proportion of total loans classified as non-performing is 5.3 percent.

According to the report, the provisions or funds set aside for these non-performing loans have increased to 105.7 percent. This represents a significant buffer to cover potential losses for the banks, even if the loans are not recovered.

The MMA also noted that the profitability metrics for banks show a notable decline compared to the previous year, 2024. The return on equity for banks is now 18.7 percent, and the return on total assets is 4.6 percent.