BANKING SECTOR'S 5.4 PCT YTD LOAN GROWTH IN LINE WITH EXPECTATION FOR 2024 - AMINVESTMENT BANK

KUALA LUMPUR, May 6 (Bernama) -- The banking sector’s year-to-date (YTD) loan growth of 5.4 per cent annualised aligns with the projected growth range of 4.0 per cent to 5.0 per cent for 2024, according to AmInvestment Bank Bhd.

In a research note today, the bank said the industry loan growth expanded by 6.0 per cent year-on-year (y-o-y) in March 2024 versus 5.8 per cent in February 2024, driven by stronger growth in household and non-household loans.

“Household loan growth was marginally higher at 6.3 per cent y-o-y in March 2024 compared to 6.2 per cent a month before, with sustained growth in mortgage and personal loans,” it said.

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The bank noted that non-household loan growth in March 2024 rose to 5.5 per cent y-o-y from 5.3 per cent in February 2024, mainly attributed to a stronger pace of financing to the transportation, storage, communication, finance, insurance and business services sectors.

“Momentum for loan applications remained slow, but March 2024 saw an improvement in approvals of non-household loans.

“Movement in the overall banking system loan approvals was negative 12.3 per cent y-o-y in March 2024 versus negative 18.6 per cent y-o-y in February 2024,” it said.

AmInvestment Bank said that loan impairments and provisions declined in March 2024.

“The industry’s gross impaired loan and net impaired loan remained stable at 1.6 per cent and 1.1 per cent, respectively.

“The industry’s outstanding impaired loans fell by 0.7 per cent month-on-month or RM259 million in March 2024,” it noted.

Overall, the bank maintained a “neutral” call on the sector, expecting the overnight policy rate to remain at 3.0 per cent during the next Monetary Policy Committee meeting on May 9, 2024.

-- BERNAMA