Malaysia's banking system 'stable'
Play
Moody's Investors Service's outlook for Malaysia's banking system over the next 12 to 18 months is stable.
“Moody’s expects the Malaysian government’s expansionary policies to support credit growth, despite a slowing economy due to lower demand for exports from the country’s main trading partners the US, Europe and China,” Moody’s analyst Simon Chen said.
The ratings agency also expects Malaysia’s economy to grow at a slower, yet robust, pace of 4 per cent this year, compared with 5.1 per cent last year.
“Government spending this year will total 26 per cent of GDP [gross domestic product], on commercial and fiscal projects that will attract private sector investment, and provide support to domestic business activities and employment,” Chen said.
Risk-adjusted profits for Malaysian banks were expected to fall modestly, due to moderating credit growth, lower net interest margins, and rising cost pressures for those banks aiming to boost their offshore operations, the ratings agency said.
