ONLY two out of the eight banking groups in the country reported higher year-on-year profits in the recently-concluded quarter of January to March, reflecting to acertain extent, the tough economic conditions both here and globally.
To be sure, of the two which registered increased earnings, one saw a huge 81% jump but this was only possible with the help of a substantial write-back for earlier provisions made.
“The performances were reflective of the prevailing operating conditions as GDP growth has been lacklustre – that showed up in slower-than-normal loan growth numbers,” says one senior banking analyst.
Notably, the banking sector is often associated with economic conditions which are tied closely to its lending business.
While Malaysia’s economy did expand by 4.5% during the first three months of the year – beating expectations, when compared with the quarter before it, the nation recorded a slowdown with the fourth quarter of 2018 seeing an expansion of 4.7%.
The growth of 4.5% was also lower when compared with the same period a year earlier which saw an expansion of 5.3%.
“Consumer sentiment was and remains shaky, hence it kept a lid on household credit expansion.