The Malaysian banking system continues to maintain healthy liquidity
Published on: Wednesday 01 June 2022
Kuala Lumpur: The banking system continued to maintain healthy liquidity positions, recording a strong liquidity coverage ratio of 156.7 percent, a position that remains supportive of intermediation activities, Bank Negara Malaysia (BNM) said. The central bank said the banking system saw steady growth in funding, particularly in retail deposits, which continued to support banks’ intermediation activities, the overall net stable funding ratio (NSFR) improving. standing at 119.0% in March 2022. The asset quality of the banking system also remained intact, with overall gross and net impairments and loan ratios remaining stable at 1.6% and 0.9% respectively, it said. he said in his monthly highlights report for April 2022, which was released today.
“Banks continued to be cautious in loan provisioning to protect against potential credit losses, with total provisions and regulatory reserves standing at RM40.2 billion in April 2022, down from RM39.8 billion. of RM in March 2022. “Total provisions stood at 1.8% as a share of total banking system loans and 113.4% of impaired loans,” he said. The BNM noted that net funding growth was also sustained in April, continued to grow at 4.6%, supported by higher growth in outstanding loans of 5.0% from 4.6% in March, amid moderating growth in the stock of corporate bonds. at 3.7% against 4.6% in March. “Growth in outstanding loans to households held steady at 4.9%, reflecting steady growth in most cases. “Loan disbursement growth during the month was slightly higher at 10.8 % vs. 10.2% in March amid loan repayment growth picking up to 8.5% (March: 3.2%),” BNM said. loans increased from 4.5% in March to 5.7%, reflecting higher growth in working capital loans which increased from 6.3% to 8.3% in March, growth in working capital loan disbursements turnover having exceeded that of refunds, he added.
In the financial market, BNM said bond yields rose, driven mainly by external developments. In April, he said, global financial conditions tightened on expectations of a faster normalization of U.S. monetary policy and greater investor risk aversion due to the military conflict in Ukraine. , and despite the fallout in domestic financial markets, adjustments remained orderly amid healthy average trading volumes. “MGS 10-year yields rose 53 basis points, alongside higher bond yields globally. FBM KLCI edged up 0.8% on improved outlook for the domestic economy as Malaysia transitioned to endemicity. “Meanwhile, the ringgit depreciated, in line with major and regional currencies, following outflows from overseas portfolios during the month as investors reallocated their funds into safe-haven assets such as in the United States,” he said. declared BNM. On exports, BNM said Malaysia’s exports rose 20.7 percent in April from 25.3 percent in March, reflecting continued strength in Malaysia’s export commodities. “Going forward, export performance will continue to benefit from external demand and the global technology cycle. In addition, high commodity prices and improved production will give further impetus to exports. “Nevertheless, the trade outlook remains dependent on global supply chain disruptions and the military conflict in Ukraine,” the central bank said. Meanwhile, BNM noted that Malaysia’s headline inflation rose slightly to 2.3% in April from 2.2% in March, while core inflation was slightly higher at 2.1%. against 2.0% in March. “The increase in inflation was mainly due to higher inflation for food outside the home, fares for air travel and repair and maintenance of personal transport,” he added. * Follow us on Instagram and join our Telegram and/or WhatsApp channels for the latest news you don’t want to miss.
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