Net financing expands 4.8pc in Q3
Published on: Saturday, November 16, 2019
By: Bernama
File photo from Bernama.
Kuala Lumpur: Net financing expanded by 4.8 per cent on an annual basis for the third quarter of this year compared with 5.6 per cent in the second quarter amid continued moderate growth in loans, says Bank Negara Malaysia (BNM).In its Quarterly Bulletin released Friday, BNM said growth of outstanding corporate bonds increased by 9.0 per cent during the quarter (Q2 2019: 10.6 per cent) with most issuances in the finance, insurance, real estate and business services sectors.ADVERTISEMENT
“Outstanding business loans recorded a 1.6 per cent growth on an annual basis (Q2 2019: 2.7 per cent). Steady loan disbursements to the manufacturing, wholesale and retail trade, restaurants and hotels, and construction sectors supported loan growth in these sectors.
“However, loan growth in the real estate sector contracted amid continued weakness in the property segment,” it said.
In a box article titled “Banking on Banks: Are They Lending Enough?”, the central bank said despite the more moderate expansion in outstanding loans and the perception that bank lending standards are overly stringent, data on loan disbursements and approvals showed that banks remain willing to lend to bankable households and businesses.
It said the recent moderation in loan growth followed a period of credit exuberance, and is an expected outcome of a deliberate and measured policy strategy to manage risks from high household indebtedness and speculative activities in the residential property segment.ADVERTISEMENT
“Further, when examining rejected loan applications more closely, it also becomes apparent that rejections are largely symptomatic of broader issues on housing affordability and creditworthiness rather than banks being overly cautious.Stay up-to-date by following Daily Express’s Telegram channel.
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“At the same time, ensuring responsible lending standards remains important to avoid increasing economic and financial vulnerabilities, and to promote the resilience of banks, households and businesses. This is critical to provide support for the economy through financial and business cycles and ultimately the welfare of Malaysians,” it added. – Bernama
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