Loan growth in Malaysia 'slowing'
Play
Banking statistics released by Malaysia's central bank, Bank Negara, showed that loan growth was stable despite slowing loan growth indicators, an indication of more downside in the months to come.
For June 2012, loan growth was stable at 12.6 per cent year on year (YOY), versus 12.5 per cent in May 2012. The growth was slightly higher for both consumer and business loans at 11.8 per cent and 13.6 per cent, respectively, in June 2012.
The growth in applications moderated from 15.1 per cent in May 2012 to 10.5 per cent in June 2012, while approvals contracted by 2.1 per cent YOY, versus an increase of 18.2 per cent in May 2012.
CIMB Research said the culprit was the contraction in residential mortgages while the pace for auto loans improved strongly to about 27 per cent YOY in June 2012.
For the month of June, the three lending indicators of loan application, loan approval and loan disbursement activities declined by 0.5 per cent, 11.5 per cent and 1.4 per cent on a month-on-month basis to 76.2 billion ringgit (Bt767.4 billion) from 76.6 billion ringgit previously.
CIMB Research banking analyst Winson Ng said that although loan growth was sustained at 12.6 per cent, downside risks still persist to his projected forecast of 10 per cent to 11 per cent for 2012.
“The slowdown will come from the consumer loan segment, especially when applications for residential mortgages in June 2012 dipped by 12 per cent on a year-on-year basis,” said Ng.
On the other hand, Alliance Research banking analyst Cheah King Yoong is maintaining his forecast of 11 per cent domestic loan growth in 2012, for now. In fact, he foresees an increasing upside to his 11-per-cent domestic loan growth forecast for 2012 in view of the strong pick-up of loans in June.
