Loan demand continues to grow in Malaysia for all segments
KUCHING: Compared with June 2017, the level of loan applications of both household and non-household rose in July this year.
The research arm of AmInvestment Bank Bhd ( AmInvestment) pointed out that levels of loan applications from both non-household and households were higher in July 2017 compared to the preceding month.
Year- on- year ( y- o- y), July 2017 saw a stronger growth in industry loan applications to 22.9 per cent from minus 15.3 per cent in June 2017.
“Household and nonhousehold loan applications grew at a faster pace of 28.6 per cent y-o-y and 16.6 per cent y-o-y respectively in July 2017.
“By loan purpose, the improvement in growth of applications was broad-based and observed in all segments.
“By sectors, the rise in loan demand was driven mainly by a stronger growth of loan applications from the manufacturing, utilities, wholesale and retail trade, and restaurants & hotels, construction and household segments,” it said.
It also pointed out that the growth of industry loan approvals continued to improve to 24.8 per cent y-o-y in July 2017 from 9.8 per cent y-o-y in the previous month.
“The level of household loan approval rose in July 2017 compared to June 2017 while that of non-households declined. In terms of percentage growth, it was higher for approvals of household and household loans in July 2017.
“By loan purpose and on a year- on- year comparison except for approval of loans for purchase non- residential property and working capital, approval for all the other segments improved from the preceding month,” it added.
Meanwhile, AmInvestment highlighted that there is stronger growth in industry deposits, supported by acceleration in business enterprises and individual deposits while current account and savings account (CASA) ratio remained stable at 26.9 per cent.
“Industry deposit growth rebounded to 4.3 per cent after a decline in the previous month. Growth in both business enterprises’ and individual deposits gained traction. CASA ratio for the sector continued to be stable at 26.9 per cent .
“LD ratio continued to be steady at 89.8 per cent while LCR for the banking sector slipped to 137 per cent from 140.0 per cent in Jun 2017 due to lower LCR for commercial and Islamic banks,” it said.
The research team also noted that the sector’s loanto-fund ratio and loan-to-fund & equity ratio was stable at 83.5 per cent and 73.5 per cent respectively.
Aside from that, AmInvestment Bank said Malaysia’s capital market activities continued to be active with healthy levels of net funds raised by the private sector.
“On a year to date basis up until July 2017, net funds raised by the private sector increased significantly by 193.1 per cent y- o- y to RM48.3 billion,” it added.
Overall, it maintained an ‘overweight’ call on Malaysia’s banking sector.