Lumpy business loans drove lending gains.
Malaysian bank loan growth edged up slightly to 5.7% in September from 5.4% in August on the back of lumpy business loans, according to UOB Kay Hian.
Loans extended to businesses rose 5.4% in September on the back of robust working capital loans and construction loans which expanded by 11%. Residential property loans also booked a positive performance after rising 8%.
Gross impaired loan (GIL) ratio also dipped from 1.58% in August to 1.53% in September as non-residential property loans was the only one segment to face asset quality pressure.
Loan approvals correspondingly surged 25.9% in September amidst a low-base of comparison from the previous year.
“We retain our 2018 loan growth assumption of 5.0-5.5% and with growth in 2019 likely to mirror that of 2018 with a slight downside bias on the back of weaker auto loans and construction related loans,” analyst Keith Wee Teck Keong said in a report.
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