Jan 1, 2010
November loan approvals, applications within expectations
PETALING JAYA: The monthly statistical bulletin for November, which was released by Bank Negara on Wednesday, showed data on loan approvals and applications that were largely in line with the trends from the beginning of the year, when lending contracted as the global economy went into recession following the global financial crisis.
The trend for business segment loan growth, according to analysts, also suggested a sustained economic recovery and that banks’ improved risk appetite was more than sufficient to sustain overall corporate lending growth and offset decline in other corporate lending segments.
An OSK Research Sdn Bhd report by Keith Wee and Lim Mei Ching said although the overall loan growth for November eased to 7% from 7.5% in October on a year-on-year basis, it was underpinned by stable household loans, especially for residential property purchases and personal loans.
“Given the steep contraction in loan approvals and applications in the beginning of the year, the moderation in loan growth was well within our expectations,” they said.
The November data showed loan growth for the month eased mainly due to lower business loan growth, which contracted 0.4% to 0.6%, compared with October’s 1% and a larger contraction for loans to small and medium-scale enterprises (SMEs) compared with October’s contraction of 5.2%.
However, forward leading indicators, according to Wee and Lim, “remained robust, with loan approvals jumping 37.8% in November versus 26.3% year-on-year in October” largely driven by the business segment, which expanded 45.3% compared with October’s 12%.
According to Bank Negara’s press statement yesterday, the Government’s RM2bil SME Assistance Guarantee Scheme launched earlier in the year had “successfully assisted more than 9,000 SMEs from all sectors of the economy.”
The central bank had said that under this scheme, participating financial institutions had approved financing totalling RM1.85bil but, effective yesterday, these institutions would no longer receive new applications, Wee and Lim said. They said the sustained growth and recovery was broad-based with the business segment registering a 33.5% surge in November compared with October’s 18.8% rise.
According to a report by HwangDBS Vickers Research Sdn Bhd, net funds raised in the capital market shot up to RM25.3bil in November on a raft of initial public offerings (IPOs) and debt raised through Malaysia Government Securities and medium-term notes.
“There were five IPOs during the month, including the listing of Maxis Bhd,” it said, adding that gross non-performing loans (NPLs) fell significantly month-on-month which narrowed the net NPLs to 1.9% from 2.1% in the past four months.
For Bank Negara statements click here
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