KUCHING: The Malaysian banking sector continues to see monthly growth in loans, advancing 0.8 per cent month-on-month (m-o-m) and 11.9 per cent year-on-year (y-o-y).
“By segment, business loans advanced at a stronger pace of 0.8 per cent m-o-m while consumer loans also grew at par of 0.8 per cent m-o-m,” said the research arm of TA Securities Holdings Bhd (TA Securities) in its research report yesterday.
Nevertheless, overall loans and advances appeared to be easing in tandem with the research house’s view of a slower second half of 2012 (2H12). As such, it maintained its loans growth projection at 11.3 per cent for this year.
Total loans application, on the other hand, recovered to grow 12.9 per cent m-o-m after contracting for three straight months in August.
“The decline in applications from the consumer segment of minus 0.6 per cent m-o-m, was compensated by the jump in the application by businesses. To recap, business loan applications fell by close to nine per cent m-o-m in August,” the research house noted.
Loan approvals were noted to have contracted for the fourth straight month, resulting in a drop in approval rates to 48.8 per cent from 55.6 per cent in August 2012. TA Securities believed the decline in approvals were underpinned by the consumer segment which saw a 5.9 per cent contraction, m-o-m.
On the other hand, approvals for the business segment improved by 3.7 per cent m-o-m after registering an 8.1 per cent m-o-m contraction in the previous month.
“Total disbursements paced up in September after having fallen for three straight months. The 1.6 per cent m-o-m increase was attributed to drawdowns by businesses while disbursements to consumers continued to slip by another 4.9 per cent m-o-m.”
The net impaired loans ratio remained unchanged at 1.5 per cent in September. Meanwhile, repayments slipped by 2.1 per cent during the month which TA Securities believed, was premised on a decline in repayments by businesses and the consumer sector.
“Despite that, we maintain our view that asset quality in the banking systems remains healhty. We note that headline impairment ratios for key sectors such as residential mortgages, non-residential mortgages, purchase of passenger cars and credit cards remain stable and manageable at two per cent, 1.1 per cent, 1.2 per cent and 1.4 per cent respectively,” the research house explained.
As such, the research house maintained a neutral stance on the banking sector, pegging its top picks as Public Bank Bhd, Malayan Banking Bhd, Affin Bank Bhd and RHB Capital Bhd.