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RAM: Worst Over For Banking Sector
KUALA LUMPUR, Nov 5 (Bernama) -- The worst is over for the Malaysian banking sector and things are going to be much better as the economy picks up, according to RAM Rating Services Sdn Bhd.
Its head of financial institution ratings, Promod Dass, said the local banking sector has good fundamentals and was well-prepared for liberalisation given its strong capitalisation levels and profitability, aided by the low interest rate environment and ample liquidity.
"The local banks, in good position to handle the liberalisation and the products niche, are almost on par with the global banks.
"They have moved ahead to expand regionally and the Islamic banking system will be another advantage," he told a press conference on 'Malaysian Banking Update' here Thursday.
Promod said the stiff competition in the banking industry would see some changes in the the deposit rates among the operators over time.
"But we don't think this is going to have a significant impact in the short term," he said.
RAM Ratings said the gross non-performing loan ratio of Malaysian banks was projected to be between three and four per cent in 2010, which was close to the expected ratio of 3.8 per cent for this year.
It said the industry's loan growth was also expected to rise to 10 per cent from 7-8 per cent, after taking into account the projection of positive gross domestic product (GDP) growth for the country in 2010.
It forecast the GDP growth of 4.9 per cent next year compared to a contraction of 3.3 per cent this year against the backdrop of good signs of global economic recovery.
RAM Ratings' senior manager of financial institution ratings, Wong Yin Ching, said the higher mortgage rate imposed by some banks would not significantly reduce the property demand.
"We do not think the increase in mortgage rate and the imposition of five percent real property gains tax would have an impact on the demand side," she said.
On interest rate, RAM Ratings' chief executive officer, Liza Mohd Noor, said it was expected to be maintained at two per cent at least until the second quarter of 2010 but would be subjected to the unpredictable changes in the global economic environment.
Meanwhile, RAM Ratings said it has upgraded the ratings of CIMB Bank Bhd, CIMB Investment Bank Bhd, OCBC Bank (M) Bhd, Maybank Investment Bank Bhd, Hong Leong Bank Bhd, Hong Leong Islamic Bank Bhd, RHB Bank Bhd, RHB Investment Bank Bhd, RHB Islamic Bank Bhd, Ambank (M) Bhd, AmIslamic Bank Bhd and Affin Bank Bhd.
In a statement, RAM Rating said the outlook on the long-term ratings of AmInvestment Bank Bhd and Alliance Bank Malaysia Bhd has also been revised.
"The ratings were to recognise the financial institutions' track records and expanding regional footprints, complemented by the repositioning of their franchises that honed their competitive advantages amid the more liberal industry landscape.
"This rating actions also identify banks that are expected to improve significantly over the next two to three years," it said.
-- BERNAMA
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CLOSING, FRIDAY, NOV 20
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US |
3.3840/3870 |
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S'pore
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2.4348/4430 |
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100 Yen
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3.8065/8103 |
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Sterling
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5.6141/6204 |
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Euro |
5.0405/0460 |
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Source: Bank Negara
Malaysia |
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