Malaysian banks see corporate, household loan growth in November

Outstanding loans extended to SMEs expanded by 7.9% during the month.

Malaysian banks’ loans extended to businesses and households grew in end-November 2023, according to the latest data released by the country’s central bank

Outstanding business loans rose 2.6% during the month, ramping up from the 1.1% expansion in October 2023. Outstanding loans extended to small and medium enterprises (SMEs) notably jumped 7.9% during the month, up from the 7.2% rise recorded in October.

For households, outstanding loan growth remained stable at 5.7%, from the 5.6% in October. This was thanks to sustained growth across most loan purposes, according to the Bank Negara Malaysia (BNM). 

Household loan growth notably continued to be driven by those looking to purchase houses (7.6%) and cars (9.4%).

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Overall, credit to the private non-financial sector grew by 4.6% as of end-November, driven by higher growth in credit to businesses, according to the BNM.

Meanwhile, banks’ capital position reportedly remained strong to withstand potential shocks and support credit intermediation growth in the economy, the central bank said.

An excess capital buffer of approximately US$28.8m (RM134.1b) was reported in November, rising from just US$28.5m (RM132.9b) in October 2023.

Overall gross and net impaired loans ratios also remained stable at 1.7% and 1%, respectively. Loan loss coverage ratio is at 119.7% of impaired loans, and total provisions account for 1.6% of total loans.