LENDING & CREDIT | Cesar Tordesillas, Malaysia

Malaysian banks continue loans growth

Bank loans are up 11.9 percent.

Furthermore, this year-on-year growth of Malaysian bank loans is enhanced with business loans and consumers loans each advancing at 0.8 percent month-on-month.

Nevertheless, overall loans and advances appeared to be slowing down in the second half of 2012. As such, it maintained its loans growth projection at 11.3 per cent for this year.

Total loans application, on the other hand, recovered to grow 12.9 per cent m-o-m after contracting for three straight months in August.

The decline in applications from the consumer segment of minus 0.6 per cent m-o-m, was compensated by the jump in the application by businesses. To recap, business loan applications fell by close to nine per cent m-o-m in August,” the research house noted.

Loan approvals were noted to have contracted for the fourth straight month, resulting in a drop in approval rates to 48.8 per cent from 55.6 per cent in August 2012. TA Securities believed the decline in approvals were underpinned by the consumer segment which saw a 5.9 per cent contraction, m-o-m.

On the other hand, approvals for the business segment improved by 3.7 per cent m-o-m after registering an 8.1 per cent m-o-m contraction in the previous month.

The net impaired loans ratio remained unchanged at 1.5 per cent in September. Meanwhile, repayments slipped by 2.1 per cent during the month which TA Securities believed, was premised on a decline in repayments by businesses and the consumer sector.

The research house maintained a neutral stance on the banking sector, pegging its top picks as Public Bank Bhd, Malayan Banking Bhd, Affin Bank Bhd and RHB Capital Bhd.

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