Malaysian banks' gross loan growth slows to 5.8% end-Jun 2016

But domestic loan growth was stable at 5.6%.

Maybank Kim Eng reports that cumulative gross loan growth for the seven banks moderated to 5.8% end-Jun 2016 from 6.3% YoY end-Mar. Maybank and CIMB’s loan growth continued to be inflated by the weakness of the MYR, with overseas loans accounting for 43% and 45% of their total loans portfolio as at end-Jun 2016.

Here's more from Maybank Kim Eng:

Maybank’s 1Q16 loan growth would have been just 1.6% ex-forex instead of 4.3% YoY while CIMB’s loan growth would have been 3.9% instead of 6.5% YoY. Public Bank’s loan growth continued to outpace its peers due to still robust demand for housing and commercial property loans in Malaysia (92% of its loan book is domestic).

On a QoQ basis, cumulative loans resumed growth of 1.9% YoY, having contracted 1.6% YoY in 1Q16. AFG and AMMB were the exceptions, with QoQ loan contractions during the period – AFG because of the front loading of SME loans in 1Q16, while in the case of AMMB, decent growth in the mortgage (+16% YoY) and SME (+7% YoY) books was offset by a 7% and 3% YoY contraction in auto and credit card loans respectively.

Cumulative domestic loan growth for the seven banks was relatively stable at 5.6% YoY end-Jun 2016. This was in line with the industry’s loan growth of 5.6%.