Sign up | Log in



Home  >>   Daily News  >>   Malaysia News  >>   Finance  >>   Malaysian banking sector to slow
NEWS UPDATES Asean Affairs                  4  August 2011

Malaysian banking sector to slow

Related Stories

June 1, 2011
Bank takeover battle in Malaysia

May 10,2011
Malaysia’s foreign reserves peak

April 22,2011
More bonds mean more Malaysian growth

April 19,2011
Malaysian bank expands to Singapore, Indonesia

April 6, 2011
Market to determine number of Malaysia bank

The banking sector is expected to see a slowing of its growth momentum, albeit moderately, in the second half of this year as it could be impacted by the global economic uncertainties like the ongoing sovereign debt crisis in Europe and the raising of the US debt ceiling, analysts said.

Analysts and industry observers said credit expansion would be sustained throughout the remaining months and much would be dependent, for example, on how fast the government's projects under the Economic Transformation Programme (ETP) kicks off, and the 10th Malaysia Plan.

Analysts are projecting loan growth this year to be in the region of 11 percent to 15 percent. The banking system's total loan growth for the first six months to June stood at about 7 percent unannualised.

OCBC Bank (M) Bhd economist Gundy Cahyadi said that although Malaysia's economic expansion would continue to mean a good year for the banking sector, its performance might not be as robust as witnessed in the first half of this year, especially in the first quarter, at which point both the return on assets and return on equity hit recent highs.

"The central bank's move to bring the SRR (statutory reserve requirement - interest free deposits banks have to keep with the central bank) back to the pre-crisis level will undeniably have an impact on banks' profitability, given its impact on liquidity. We are also seeing some moderation starting to finally hit mortgage growth, which is typically one of the more profitable segments of commercial bank lending,'' he noted.

Gundy said the unpredictable global market conditions would weigh on the banking sector even if real economic expansion soldiers on.

Bank Negara recently raised the SRR to 4 percent from 3 percent to mop up excess liquidity in the financial system.

Analysts and economists view the 100 basis point increase in SRR as normalising it to the SRR in the pre-2009 financial crisis level of 4 percent. It was maintained at this level from September 1998 to November 2008.

RAM Ratings head of financial institution ratings Promod Dass said the outlook on the Malaysian banking sector was still stable. He said the industry parameters which the rating agency was keeping close tabs on like asset quality, capitalisation as well as liquidity and funding positions were still within expectations.

RAM Ratings, he added, was projecting an 11 percent loan growth and an industry gross impaired-loan ratio of around 3 percent for 2011. Dass said, however, the rating agency remained vigilant over the potential weaker global economic growth stemming from the on-going sovereign debt saga in Europe and the US$2.4 trillion cut in US public spending following the recent deal approved by the US Congress to raise the debt ceiling.

These factors, he added could dampen Malaysia's economic growth and its banking system's loan growth for the second half of the year.


Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Today's  Stories    4  August  2011 Subsribe Now !
• Thai rice policy threatens Cambodian millers Subcribe: Asean Affairs Global Magazine
• Buoyant Indonesian economy as others struggle Asean Affairs Premium
• Car ownership limit proposed in Jakarta
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Malaysian banking sector to slow
• Asean countries must lead in energy connectivity
• Thai-Cambodia gas talks to resume
• Economists now back wage increase
• Consensus reached on sea dispute p

Asean Analysis    4  August  2011

Advertise Your Brand
• International Rivers NGO: Work on Xayaburi Dam continues Sponsor Our Events

Asean Stock Watch   4  August  2011

• Asean Stock Watch-August 4 p

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand