Malaysia's private sector credit grows 5.4% in April

Thanks to higher growth in both outstanding loans and corporate bonds.

Malaysia's credit to the private non-financial sector grew by 5.4% as of end-April 2024 (up from 5.2% in March 2024), driven by higher growth in both outstanding loans (5.9%; March 2024: 5.7%) and corporate bonds (3.4%; March 2024: 3.2%).

Business loan growth increased to 5.6% (March 2024: 5%) with higher growth in working capital and investment-related loans. Most business sectors, including manufacturing and construction, saw higher loan growth.

For households, outstanding loan growth remained steady at 6.2% (March 2024: 6.2%), with stable growth across most purposes, including housing and car purchases.

The banking system maintained strong liquidity and funding positions to support intermediation. The aggregate Liquidity Coverage Ratio was 152.2% (March 2024: 150.3%) whilst the aggregate loan-to-fund ratio was stable at 82.3% (March 2024: 81.7%).

Asset quality in the banking system remained robust. Gross and net impaired loans ratios were stable at 1.6% and 1% respectively. The loan loss coverage ratio (including regulatory reserves) was prudent at 120.4% (March 2024: 121.1%) of impaired loans, with total provisions at 1.5% of total loans.

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