Banks well positioned to withstand shocks, Bank Negara says


  • Banking
  • Thursday, 31 Oct 2019

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

KUALA LUMPUR: The country's banking system capitalisation remained strong in September and the banks are well-positioned to withstand severe macroeconomic and financial shocks, Bank Negara Malaysia said.

It said on Thursday the banking system had excess capital buffers of about RM110bil as at September.

Excess total capital refers to total capital above the regulatory minimum, which includes the capital conservation buffer requirement and bank-specific higher minimum requirements, it said in a statement.

Bank Negara 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, it said.

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

“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, ” it said.

Bank Negara said net financing growth was sustained at 5.2% in September (August: 5.2%), amid sustained growth in outstanding corporate bonds (September, August: 9.0%) and outstanding loans (September: 3.8%, August: 3.9%) across the business and household segments.

Total loans disbursed by the banking system moderated to RM99.5bil (August: RM101.4bil), but remained higher than the historical monthly average of RM93bil.

The moderation from August was mainly in disbursements to households, particularly for the purchase of securities and residential properties.

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