KUALA LUMPUR, 31 Jan 2023 — Credit to the private non-financial sector grew by 4.7 per cent at end of December 2022 compared to 4.4 per cent in November 2022, said Bank Negara Malaysia (BNM).
“This reflected higher growth in credit to businesses which stood at 3.8 per cent in December 2022 against 3.2 per cent in November last year,” BNM said in its Monthly Highlights – December 2022 report today.
For businesses, BNM said, the stronger credit growth was driven by higher growth for both outstanding corporate bonds at 4.6 per cent in December 2022 compared to 3.5 per cent in the previous month and outstanding business loans (which was at 3.3 per cent in December 2022 against three per cent recorded in the month before.
Meanwhile, outstanding household loans grew by 5.5 per cent in December 2022 (November: 5.6 per cent), as growth in loan repayments outpaced that of disbursements. Despite some moderation in outstanding loan growth for the purchase of housing and cars, growth in loan disbursements remained strong at 10.4 per cent (November: 9.1%).
On the other hand, BNM said asset quality in the banking system remained intact attributable to overall gross and net impaired loans ratios which remained broadly unchanged at 1.7 per cent (November: 1.8 per cent) and 1.1 per cent (November: 1.1 per cent), respectively.
Loan loss coverage ratio (including regulatory reserves) continued to record a prudent level of 118.2 per cent of impaired loans, with total provisions accounting for 1.7 per cent of total loans.
BNM also said that domestic financial conditions continued to ease, reflecting improving investors’ risk sentiment.
“Global financial conditions were mainly driven by expectations for a slower monetary policy tightening by major central banks moving forward, as inflation showed signs of peaking,” the central bank said.
Meanwhile, investors’ risk sentiment was supported further by the earlier-than-expected reopening of China’s international borders, BNM said.
Subsequently, domestic financial conditions eased, with the 10-year Malaysian Government Securities yields declining by 4.0 basis points, BNM said.
The central bank also said that the FBM KLCI rose by 0.4 per cent contributed mainly by the plantation sector amid higher crude palm oil prices during the month.
BNM also noted that the ringgit continued to appreciate against the US dollar by 0.9 per cent, in line with the movement of other regional currencies.
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