BNM: Malaysian banking system continues to maintain healthy liquidity

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Bank Negara Malaysia logo is seen inside Sasana Kajang in Kuala Lumpur on June 24, 2019. — Photo by Ahmad Zamzahuri

Tuesday, May 31, 2022 4:18 PM MYT

KUALA LUMPUR, May 31 – 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 business, Bank Negara Malaysia said ( BNM).

The central bank said the banking system saw steady growth in funding, particularly retail deposits, which continued to support banks’ intermediation activities, with the overall net stable funding ratio (NSFR) standing at to 119.0% in March 2022.

The quality of banking system assets also remained intact, with overall gross and net impaired loan ratios holding steady at 1.6% and 0.9% respectively, it said in its monthly financial highlights report. April 2022, published 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 from RM39.8 billion. RM in March 2022.

“Total provisions were 1.8% as a percentage 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.

“Outstanding household loan growth held steady at 4.9%, reflecting steady growth in most cases.

“Loan disbursement growth during the month was slightly higher at 10.8% compared to 10.2% in March amid a recovery in loan repayment growth of 8.5% (March: 3.2% %),” BNM said.

For businesses, loan outstanding growth fell to 5.7% from 4.5% in March, reflecting higher growth in working capital loans which rose from 6.3% to 8.3 % in March, as growth in working capital disbursements outpaced that of repayments, 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 US monetary policy and greater risk aversion among investors 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 US,” 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. — Bernama

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