BUSINESS

BANKS' ASSET QUALITY TO IMPROVE WITHIN NEXT 3-6 MONTHS

23/09/2020 09:51 PM

KUALA LUMPUR, Sept 23  -- Malaysian banks’ asset quality is expected to improve to pre-COVID-19 level within the next three to six months with the repayment of loans and assistance, a media roundtable with selected banks were told today.

RHB Bank Bhd group retail banking head Rakesh Kaul said the second-quarter results for most of the banks reflected the impact of the six-month blanket moratorium.

“The banking industry is clearly anticipating some stress post-moratorium and it is reflected in the provisions that most banks have taken. I think it is a prudent measure,” he said.

However, the banks are seeing improvements in asset quality. 

“So we think that it will be normalised within the next three to six months and go back to pre-COVID-19 level,” he said at the media roundtable session with selective heads of banks and the Credit Counselling and Debt Management Agency (AKPK) here today.

Improvement in asset quality has to work both ways with customers playing their part, which will eventually be for the betterment of the industry and the country’s economy, said Maybank head of community financial services Malaysia, Datuk Hamirullah Boorhan.

“So, it cannot be just one-sided. When customers come forward, we will see what is best suited for them and will be able to address the issue of asset quality as well,” he said.

Meanwhile, CIMB chief executive officer Datuk Abdul Rahman Ahmad said asset quality is among the crucial reasons why the blanket moratorium needs to end.

“We need to assess and get the data on the vulnerable group. If a blanket moratorium is continued, then all the banks are unsure of the asset quality, which means the banking industry would not be able to lend and help the economy recover,” he said.

Abdul Rahman said for the economy to recover, the banking industry needs to be strong and able to provide the necessary funding for businesses to prosper and grow.

Hence, a targeted moratorium is the right approach, he added.

At the roundtable, the banks reiterated their commitment to provide repayment flexibility to other borrowers, be it individuals or businesses affected by COVID-19.

Banks are allowing borrowers to pay only the interest portion of the loan over a period of time, lengthening the overall period of the loan to reduce monthly instalments and providing other forms of flexibility until a borrower is in a more stable position to resume repayments in full.

As of Sept 11, 2020, banks have contacted more than 2 million borrowers to offer them loan repayment assistance.

Of this amount, banks have spoken to 1.4 million borrowers and more than 380,000 have confirmed their needs for loan repayment assistance, whereas the remaining are considering the financing options that are available to them.

They say 98 per cent of completed loan repayment assistance applications were approved by banks.

The application process for individuals is expected to take between one and five days, whereas for small and medium enterprises (SMEs) it is expected to take three days to two weeks after the completed applications are received by banks.

Various channels were made available to ease borrowers in seeking assistance such as online platforms as well as banks’ extending operation hours, including during weekends.

-- BERNAMA

 

 


 


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