LENDING & CREDIT, TRADE FINANCE | Staff Reporter, Malaysia

Malaysian banks' external liabilities hit US$39.6b in 2016

It accounted for 17.3% of the banks' balance sheets.

According to Maybank Kim Eng, external assets and external liabilities of Malaysian banks accounted for 10.2% and 17.3% of their balance sheets in 2016. On a net basis, external liabilities widened to MYR175.6b (US$39.6b) from MYR138.9b (US$31.3b) in 2015, comprising mainly capital funds maintained by locally incorporated foreign banks (LIFBs), securities held under custody, non-resident deposits and interbank deposits. Domestic banking groups (DBGs) maintained a net external assets position of MYR4.1b (US$925m).

"DBGs’ overseas assets of overseas subsidiaries and branches grew 7.2% YoY to MYR559.3b (US$126.2b) end-Sep 2016 and accounted for 24.3% of total assets. The quality of such assets deteriorated somewhat in Indonesia and Singapore in particular, and as such, the median gross impaired loans ratio rose to 3.2% in 3Q16 from 2.2% in 3Q15. On aggregate, exposure of overseas operations to the O&G related (including shipping) sectors was just 0.8% of total overseas assets," said Maybank Kim Eng.

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