KUCHING: Malaysia’s loan growth has been projected by the research arm of Kenanga Investment Bank Bhd (Kenanga Research) to ease further to 4.2 per cent in 2019, from 5.6 per cent in 2018.
According to Kenanga Research, the outstanding loans growth retained a downtrend in April, registering a 13-month growth moderation of 4.5 per cent year on year (y-o-y), down from 4.9 per cent in March.
The research arm noted that the growth moderation was due to loan repayment (13.4 per cent) far outpaced loan disbursement (8.5 per cent).
“Overall, we project loan growth to ease further to 4.2 per cent in 2019 on the expectation of growth slowdown spillover from both externally and domestically,” Kenanga Research said.
“Meanwhile, following Bank Negara Malaysia’s (BNM) decision to cut the overnight policy rate by 25 basis points on May 7, we believe that the central bank will stay put for the rest of the year barring unforeseen external shock.”
Kenanga Research highlighted that on a month on month (m-o-m) basis, loan growth was unchanged, though a weighted average lending rate of commercial banks edged off to 5.02 per cent (5.03 per cent in March).
The research arm has however pointed out that the base lending rate of average commercial banks increased to 6.92 per cent (6.91 per cent in March) ahead of the BNM monetary policy meeting in May.