The Malaysian Reserve

Banks’ loan growth stabilises at 4.4%, RM16t in March 2018

Banks Malaysia - loans (Graphic by dayang Norazhar)

By FARA AISYAH / GRAPHIC BY TMR

The banking system loans resumed a moderate growth trend of 4.4% year-on-year (YoY) to RM1.6 trillion as at March 2018, against 4.5% achieved in the previous month.

AmInvestment Bank Bhd said the number was due to a slower non-household loan growth, while growth in household loans remained stable.

It said loan disbursements declined by 1.6% YoY in March, while loan repayments were subdued with a growth of 0.3% YoY.

“Non-household loans expanded at a slower rate of 2.9% YoY, down from 3.1% YoY in the preceding month. Growth in working capital loans shrank to 0.3% YoY (February 2018: 0.7% YoY).

“By sector and comparing to the previous month, the slowdown was mainly contributed by a weaker expansion of loans in the agriculture, mining and quarrying, wholesale, retail, restaurants and hotels, transport, storage and communication, as well as the finance, insurance and business services sectors,” it stated in a report yesterday.

Meanwhile, household loan growth remained stable at 5.6% YoY in the month.

With exception for the slower growth of loans for the purchase of securities and non-residential property, AmInvestment Bank said loan growth for all the other segments has been stable.

Growth in loans for the purchase of residential property also continued to be steady at 9.0% YoY.

The investment bank added that on a year-to-date basis, industry loans growth was at an annualised 4.8%.

It remained on track to meet AmInvestment Bank’s projection for a 5% loan growth in 2018, on the back of a gross domestic product growth of 5.5%.

Meanwhile, MIDF Amanah Investment Bank Bhd expects loan growth to accelerate in the coming month as the loan pipeline still looks healthy.

“We maintain our expectations that loan growth will come in better in the calendar year 2018 (CY18) versus CY17 level. This is premised on the current trend of loans applied and approved, which will provide a steady loan pipeline.

“In addition, the good economic growth we saw in CY17 will spill over and translate to loan growth, at least up until the first half of CY18,” it said in a report yesterday.

Thus, MIDF Research also expects the loan demand will accelerate from its current trend, which will lead to a loan growth of +6% YoY for this year.

MIDF Research said applied loans were flat in March at RM76.7 billion, due to a pull back in loan demand for the purchase of passenger cars and residential properties.

However, the decline of these two segments was moderated by a continued pickup in applied loans for the purchase of non-residential properties and personal use.

As a result, the first-quarter growth in CY18 was still higher compared to CY17.

MIDF Research said approved loan growth fell by 7.6% YoY in March. Hence, loan approval rate was maintained at a healthy level of 43.3%.