The Malaysian commercial banking sector is robust with ample liquidity

February 15, 2017
Kuala Lumpur, Tuesday, 14 February 2017: The Association of Banks in Malaysia would like to clarify a recent news report that banks have limited capacity to lend more.

Malaysian banking system’s liquidity remains healthy as the sector’s Basel III liquidity coverage ratio (LCR) stood at 125% as at end-December 2016. The sector’s loan-to-deposit ratio is also robust at 89.8% with the level of net impaired loans sustained at 1.2% of net loans, and loan loss coverage ratio at 90.2% as at December 2016.

Commercial banks are still committed to support businesses and corporates as reflected in the recent data. In the month of December 2016, outstanding business loans of the banking system expanded by 5.0% year-on-year with the growth driven by the annual expansion of loans to most major sectors such as the wholesale and retail trade, restaurants and hotels, finance, insurance and business services, and transport. Businesses are operating in a stable environment with the ringgit stabilizing. Meanwhile, for households, outstanding loans of the banking system grew by 5.3% in December in line with the expected gross domestic product (GDP) growth for the year.

Banks have been pivotal in supporting the country’s growth by extending credit facilities to businesses and households, and they will continue to do so in keeping with the level of economic activities.

Commercial banks are always active in the business of lending and viable businesses will continue to be able to obtain financing. Businesses which face challenges in their loan applications are encouraged to discuss with their financiers when making the suitability and affordability assessments for any facility they apply for. Corporates and entrepreneurs are urged to shop around for a financing package which best meets their needs.

Banks on their part are committed to enhance their capability to support businesses and entrepreneurs which include the offering of various loan packages to meet the needs of innovative enterprises.

ABM also provides avenues for businesses and entrepreneurs to highlight issues which they may face with their banks in connection to their loans or loan applications. Entrepreneurs may contact ABMConnect at 1-300-88-9980 or write in to eABMConnect via its website, with regard to general queries on financing or specific issues related to commercial banks.
ABMConnect | Toll-free on 1300-88-9980

ABMConnect provides an avenue for consumers to clarify any doubts and verify information on conventional banking issues.