September loan disbursements down 1.9% on-month

PETALING JAYA: Total loans disbursed by the banking system declined 1.9% to RM99.5 billion in September compared with RM101.4 billion in the previous month, according to Bank Negara Malaysia (BNM).

However, the central bank said the figure remained higher than the historical monthly average of RM93 billion.

“The moderation from August was mainly in disbursements to households, particularly for the purchase of securities and residential properties,” it said in a statement.

Banking stocks on Bursa Malaysia saw strong buying interest today, led by gains in Public Bank Bhd, Hong Leong Financial Group Bhd and Hong Leong Bank Bhd, which rose 90 sen, 42 sen and 20 sen, respectively.

Shares of CIMB Group Holdings Bhd, Alliance Bank Malaysia Bhd and Malayan Banking Bhd went up 16 sen, 15 sen and 13 sen, respectively.

BNM said net financing growth remained unchanged at 5.2% in September on the back of sustained growth in outstanding corporate bonds (9%) and outstanding loans (3.8%) across the business and household segments.

Net financing refers to outstanding loans of the banking system (excluding development financial institutions) and outstanding corporate bonds.

BNM said the domestic financial markets continued to be affected by global developments and shifts in investor sentiments.

“Early in the month, signs of progress in global trade talks contributed to improved investor sentiments, leading to broad gains across financial market indicators,” it said.

However, sentiments deteriorated towards the end of the month as investors turned cautious from heightened concerns over the global growth outlook and a potential escalation in global trade disputes.

“As a result, the ringgit appreciated by 0.8% against the US dollar, driven by net portfolio inflows by non-residents during the month,” BNM said.

The central bank also highlighted that the adjustments in domestic bond yields were also marginal amid sustained demand by non-resident investors.

“However, the domestic equity market continued to be affected by global uncertainties with the FBM KLCI declining by 1.8% during the month.”

Nonetheless, Bank Negara said that banking institutions are well positioned to withstand severe macroeconomic and financial shocks, with excess capital buffers of approximately RM110 billion as at September 2019.

source https://www.thesundaily.my/business/september-loan-disbursements-down-1-9-on-month-AB1560389