KUALA LUMPUR, June 2 — As household income is affected by the Covid-19 pandemic, loan growth has taken a toll, as the moratorium kicks in. MIDF, in a research note today, said that as of April this year, the banking sector loan growth remained at 4.0 per cent year-on-year (yoy) with lower retail...
MIDF said that as of April this year, the banking sector loan growth remained at 4.0 per cent year-on-year with lower retail and loan applications. — Reuters pic
However, as businesses are now in the phase of recovery, business loan growth has grown at a faster pace of 3.5 per cent year-on-year to RM792.2 billion, driven by higher expansion of working capital loans of 4.9 per cent yoy to RM405.0 billion. “On a sequential month basis, it showed a decline from RM906.7 billion. One of the main drivers were the faster decline in loans for the purchase of passenger cars as this fell 1.3 per cent yoy to RM157.1 billion from a contraction of 1.2 per cent yoy as at March this year,” it said.
“Meanwhile, loan approvals saw a bigger contraction of 48.4 per cent yoy compared with a decline of 22.5 per cent yoy posted the previous month which is in tandem with the contraction of loan applications,” it said. AmInvest, meanwhile, said that banks’ interest income will be impacted by the consecutive overnight policy rate cuts, leading to lower net interest margins.
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