Net financing growth increases slightly to 4% in October 2021

KUALA LUMPUR: Net financing growth increased slightly to 4.0 per cent in October from 3.9 per cent in September, reflected higher growth in outstanding loans, amid moderation in outstanding corporate bond growth, said Bank Negara Malaysia (BNM) today.

In its monthly highlights for October 2021, the central bank said outstanding household loan growth increased to 3.7 per cent versus 3.2 per cent in the previous month amid higher loan disbursements across all purposes.

"For businesses, outstanding loan growth in October stood at 3.1 per cent against 2.3 per cent in September, continued to be supported by higher growth in working capital loans (October: 5.9 per cent; September: 4.5 per cent), which remained above its historical average," it said.

The central bank said banking system funding and liquidity positions remained supportive of intermediation activity.

As of end-October 2021, the banking system’s liquidity coverage ratio (LCR) remained strong with October at 153.3 per cent versus September’s 154.4 per cent.

"Loan-to-fund and the loan-to-fund-and-equity ratios also remained stable at 81.6 per cent and 71.1 per cent respectively," it added.

BNM said overall gross impaired loans ratio declined marginally to 1.5 per cent from September's 1.6 per cent, driven by the household segment.

It said banks continue to support viable borrowers facing temporary financial difficulties through repayment assistance packages and continue to be prudent in loan loss provisioning.

Total provisions set aside against potential credit losses stands at 1.9 per cent of the total banking system loans, it said. - Bernama
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