Malaysian banks' loans grew 7.9% in 2015

Thanks to working capital loans from 2Q15 to 3Q15.

Loans growth moderated close to UOB KayHian's full-year target. Total loans stood at RM1,445.1b in Dec 15, closing off the year with a 7.9% loans growth vs our forecasted 7.2% growth. The slight deviation was largely due to the robust growth traction in working capital loans from 2Q15 to 3Q15 which was clearly not sustainable, as it was driven largely by potential short-term working capital constraints by SMEs during the sharp depreciation of the ringgit (which to a certain extent has stabilised).

Here's more from UOB KayHian:

Consequently, working capital loans growth continued to moderate downwards from a peak of 15.9% in Aug 15 to Dec 15’s 10.4% yoy growth (Nov 15: 12.0% yoy growth). Given the expected moderation in both household and business loans, we retain our 2016 loans growth forecast of 6.8%.

Household loans growth continued its downward growth trajectory, finishing the year with a 7.7% yoy growth (2014: 9.9%) as residential loans growth continued to decline to 11.9% vs (12.2% in Nov 15 and 13.3% in 2014)

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