KUALA LUMPUR, 30 Nov 2022 — Malaysia’s banking sector remains well-capitalised to support economic recovery Bank Negara Malaysia (BNM) said.
According to BNM, banks’ capital position remained strong to withstand potential stress and continue to support credit flows to the economy with excess capital buffers of RM123.1 billion.
“Capital ratios rose marginally in October, driven by increases in retained earnings and new issuances of capital instruments,” BNM said in its monthly highlights – October 2022 report today.
According to the central bank, the resilience of banks continued to be underpinned by sound asset quality with overall gross and net impaired loans ratios remain unchanged at 1.8% and 1.1%, respectively.
BNM said loan loss coverage ratio (including regulatory reserves) remains at a prudent level of 114.2% of impaired loans, with total provisions accounting for 1.8% of total loans.
As of end-October 2022, the banking system recorded RM 41.9 billion of total provisions and regulatory reserves, BNM said.
Net financing grew by 5.7% as at end-October (September: 5.6%), reflecting slightly higher growth in both outstanding loans (6.5%; September: 6.4%) and corporate bonds (3.6%; September: 3.5%).
Household loan growth moderated to 6.3% (September: 6.6%) as loan repayments growth outpaced that of disbursements across major loan purposes. “The slower growth in disbursements reflected moderation in loan demand particularly for the purchase of big-ticket items such as houses and cars,” the central bank said.
For businesses, BNM said growth in outstanding loans increased to 5.5% (September: 5.2%), with higher loan growth recorded across most purposes. By segment, growth in loan disbursements remained forthcoming, particularly for small and medium enterprises.
BNM also said that exports registered a growth of 15% (September: 30.1%) in October 2022. Manufactured export growth was driven by electrical and electronicand petroleum products while commodities exports continued to be attributed mainly to liquefied natural gas and crude petroleum shipments.
“Moving forward, the moderation in global growth and lower commodity prices are expected to weigh on Malaysia’s export growth. Nevertheless, Malaysia’s diversified exports across products and markets should help cushion this impact,” BNM added.
– Akses Malaysia