KUALA LUMPUR, March 3 — RHB Research believed that banks are still cautiously optimistic about economic prospects, and any potential deterioration in asset quality should be manageable as lending indicators close to pre-pandemic levels.
In a research note today, it said system loan applications in January stood at RM85 billion, -8.0 per cent month-on-month and -13 per cent year-on-year, edging closer to the pre-pandemic monthly average of RM60 billion-RM80 billion.
“The slowdown comes together with the rise in the average lending rate to 5.05 per cent from 5.01 per cent in December 2022 compared to 3.44 per cent in January 2022. Despite this, loan disbursements appear steady still, with RM199 billion disbursed in January, against the pre-pandemic monthly average of RM90 billion -RM120 billion,” it added.
RHB Research reiterated its loans growth of target of 5.0 per cent in the 2023 financial year — implying a slight moderation from +5.7 per cent in the 2022 financial year, but in line with guidance from banks.
For January 2023, system loans added 4.9 per cent year-on-year, with momentum seen in the utilities and household sectors, but partly mitigated by a decrease in mining and quarrying loans.
Meanwhile, MIDF Research noted that system deposits rose by a strong +7.0 year-on-year, reporting +0.3 per cent month-on-month growth while current account savings accounts (CASA) and fixed deposits (FDs) reported sequential-month contractions.
“Note that while conventional FDs reported good growth, it was pulled by weaker Islamic FD performance.
“We believe the contractions were likely due to Bank Negara Malaysia’s decision to maintain the current overnight policy rate level — dissuading potential FD placers from carrying out their intended placement,” said MIDF Research.
MIDF Research said both loan-to-deposit and CASA ratios remain relatively stable at 89.4 per cent and 31.2 per cent respectively.
— Bernama
