Malaysian banks' individual deposit growth hits all-time low of 4.4%

Loan growth also slipped further to 5.6% in June.

Maybank Kim Eng says Malaysian banks' system deposits contracted for the fourth consecutive month (-0.8% YoY) while CASA also contracted 0.4% YoY in June. Individual deposit growth hit a new low of 4.4% YoY in June while business and financial institution deposits contracted 0.8% YoY and 9.6% YoY respectively.

"The industry’s loan/deposit ratio (LDR) rose to 87.8% end-June from 87.6% end-May. The loan/fund ratio moved up marginally to 82.6% from 82.3% end-May while the loan/fund and equity ratio was stable MoM at 73.8%."

Here's more from Maybank Kim Eng:

There has been no respite to the downtrend in loan growth, which slipped further to 5.6% YoY in Jun 2016 from 6.2% YoY in May 2016. Household (HH) loan growth grew 6.0% YoY while non-HH loan growth was a slower 5.0% YoY.

On an annualized basis, total industry loans expanded just 2.8%. On a 3-month moving average (3M MA) basis, loan applications rose just 2.2% YoY in June, while loan approvals contracted for the 10th consecutive month on 3M MA, at a double digit pace of 12%. We maintain our 6.0% industry loan growth forecast for 2016 for now.