In Act 4, sc. 3, which takes place in England, Malcolm wants to test Macduff's loyalty. Malcolm wants to overthrow Macbeth and Macduff says he wants the same. Malcolm, however, wants to be sure that Macduff is not tricking him and is not simply being a sycophant. Malcolm figures that if he tells Macduff that he would be a worse person than Macbeth and a worse king than Macbeth and Macduff says that it is OK if Malcolm is like that, then Macduff doesn't really care about Scotland. On the other hand, if Macduff is upset and no longer wants Malcolm to be king, then Malcolm will know that Macduff's loyalty is with the country. In Malcolm's "test" he tells Macduff that he'd have every character flaw and vile trait possible; he'd be lustful, greedy, selfish, dishonest, cowardly, etc. Macduff's response is that not only does Malcolm not deserve to be king, he does not deserve to live having such horrible faults. With those words, Malcolm confesses his "trick" to Macduff and tells him that the only lie he's ever told is the one he just told to Macduff about having terrible faults. He says that now he is sure where Macduff's loyalty rests and he is pleased and contented.
In Act IV, Scene III of Macbeth, in a conversation with Macduff, Malcolm describes himself in very negative and unflattering terms. He says that he is full of greed ("avarice"), for example, and that he would go as far as to invent quarrels with his noblemen just so that he could confiscate their lands and take their jewels. He also claims to be extremely lustful:
"But there’s no bottom, none,
In my voluptuousness."
His lust is so strong and so overpowering that no woman can satisfy him and no man is capable of standing in his way.
In response, Macduff acknowledges that greed and lust are indeed terrible sins and that they have caused the downfall of many kings. But he urges Malcolm to not be afraid since his lust can be hidden from public view and his greed can be satisfied by Scotland's numerous treasures.
For Macduff, Malcolm may have many character flaws but he is still a better man than Macbeth and it is for this reason that he tries to reassure him.