Net financing growth increases slightly to 4% in October 2021

by BERNAMA / pic by TMR

NET financing growth increased slightly to 4% in October from 3.9% in September, reflecting higher growth in outstanding loans, amid moderation in outstanding corporate bond growth, said Bank Negara Malaysia (BNM) yesterday. 

In its monthly highlights for October 2021, the central bank said that outstanding household loan growth increased to 3.7% versus 3.2% in the previous month amid higher loan disbursements across all purposes. 

“For businesses, outstanding loan growth in October stood at 3.1% against 2.3% in September, continued to be supported by higher growth in working capital loans (October: 5.9%; September: 4.5%), which remained above its historical average,” it said. 

The central bank said that banking system funding and liquidity positions remained supportive of intermediation activity. 

As of end-October 2021, the banking system’s liquidity coverage ratio remained strong with October at 153.3% versus September’s 154.4%. 

“Loan-to-fund and the loan-to-fund-and-equity ratios also remained stable at 81.6% and 71.1% respectively,” it added. 

BNM said that the overall gross impaired loans ratio declined marginally to 1.5% from September’s 1.6%, driven by the household segment. 

It said that banks continue to support viable borrowers facing temporary financial difficulties through repayment assistance packages and continue to be prudent in loan loss provisioning. 

Total provisions set aside against potential credit losses stands at 1.9% of the total banking system loans, it said.