KUALA LUMPUR, Feb 26 — Net financing expanded at 4.5 per cent in January 2021 amid a higher outstanding loan growth of 3.8 per cent versus 3.4 per cent in December last year, according to Bank Negara Malaysia (BNM).
In its January highlights, the central bank said outstanding corporate bond growth, however, moderated slightly to 6.3 per cent from 6.5 per cent previously.
BNM said outstanding household loan growth was sustained at 4.9 per cent (December: 5.0 per cent) with disbursements remaining above historical average at RM28.8 billion (2017-2019 monthly average: RM27.8 billion).
Meanwhile, outstanding business loans grew at 1.5 per cent after a slower growth in December 2020, contributed mainly by the small and medium enterprise (SME) segment.
BNM said gross impaired loans ratio increased marginally to 1.6 per cent in the month under review compared to 1.56 per cent in December 2020.
"Banks continued to pre-emptively identify loans with higher credit risks and set aside additional provisions against future potential losses to ensure their continued resilience," it said.
In addition, banking system liquidity coverage ratio (LCR) remained at a healthy level, despite a slight decline in January 2021 (December: 148.2 per cent).
This was supported by higher holdings of marketable securities and placements with central banks.
“Banks’ funding profile also remained stable amid sustained growth in deposits,” it said.
In January, the performance of domestic financial markets was affected by a confluence of global and domestic factors, BNM said.
"Globally, an uptick in US Treasury yields amid rising US inflation expectations pushed global bond yields higher, while supporting a broad strengthening of the US dollar.
"As a result, the 10-year MGS yield increased by 5.4 basis points and the ringgit depreciated by 1.0 per cent against the US dollar, in line with regional trends," it said.
Domestically, investor sentiments were affected by the re-imposition of stricter containment measures to address rising Covid-19 infections.
"In particular, concerns on the impact of these restrictions to domestic corporate earnings weighed on equity market sentiments. As a result, the FTSE Bursa Malaysia KLCI declined by 3.7 per cent during the month," BNM noted.
— Bernama
