The banking system maintains healthy levels of liquidity

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PETALING JAYA: The banking system continues to maintain healthy liquidity positions, recording a strong liquidity coverage ratio of 156.7%, a position that continues to support intermediation activities, according to Bank Negara.

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% in March 2022.

The quality of banking system assets also remained intact, with overall gross and net impaired loan ratios remaining stable at 1.6 percent and 0.9 percent, respectively, Bernama said, according to Bank Negara, in its monthly report on April 2022 highlights released yesterday.

“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 amounted to 1.8% as a percentage of total banking system loans and 113.4% of impaired loans,” he said.

Bank Negara noted that net funding growth was also sustained in April, continuing to grow at 4.6%, supported by higher outstanding loan growth of 5% from 4.6% in March, in a context of moderation in the growth of outstanding corporate bonds to 3.7% against 4.6% in March.

Growth in household loans outstanding was sustained at 4.9%.

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