RETAIL BANKING | Roxanne Uy, Hong Kong

Loan growth in Asia slows in 1Q12

Eight of twelve banking markets across the region saw decelerating loan growth which caused improving funding gaps in Asia.

According to Tom Quarmby, Head of Regional Banks Sector at Barclays Research, while funding gaps across the region did improve in 1Q12, this was largely due to deceleration of loan growth (in 8 of 12 banking markets), rather than acceleration of deposit growth (which only occurred in 4 of the 8 banking markets, and then only modestly).

"This improvement in liquidity was dramatically different to 2009 when both lending growth and deposit growth accelerated although with far stronger growth in deposits as, we believe, liquidity flowed into the region from lower yielding, slower growth economies in the West. In 1Q09, deposit growth outstripped loan growth in 8 of the 12 major banking systems in the region," he added.

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