KUALA LUMPUR, April 29 – Malaysia’s banking system remains well positioned to support the economic recovery, Bank Negara Malaysia (BNM) said.
The central bank said that in March 2022, banks maintained high capitalization levels, with excess capital reserves of RM125.5 billion.
“Capital ratios declined slightly, primarily due to valuation adjustments of available-for-sale financial instruments in a rising bond yield environment,” he said in his March 2022 Monthly Highlights Report. , published today.
The central bank added that the bank’s asset quality remained strong in March 2022, with overall gross and net impaired loan ratios remaining broadly stable at 1.5% and 0.9%, respectively.
The BNM said bank provisioning levels remained high as banks continued to be cautious, with a loan loss coverage ratio of 133% compared to an average of 129% in 2020-21.
“Total provisions fell slightly to 1.8%, as a percentage of total banking system loans, from 1.9% in February,” the BNM said.
In domestic financial markets, BNM said conditions had tightened, following 10-year Malaysian government securities (MGS) yields rising 20.6 basis points and FBM falling. KLCI of 1.3%.
The local financial market was also pulled by tighter global financial conditions and geopolitical developments, with global financial market sentiments affected by the faster-than-expected path of monetary policy normalization by the US Federal Reserve and the conflict. in Ukraine.
“The corresponding general strength of the US dollar during the month also caused the ringgit to depreciate marginally,” BNM said.
Despite the weaker performance in financial markets, BNM said the adjustments remained orderly amid ample trading liquidity. — Bernama