Bank Negara: Liquidity remains ample in Malaysia’s banking system

BNM said total loans disbursed by the banking system remained steady at RM101.5 billion in May compared to RM101.6 billion in the previous month. — Reuters pic
BNM said total loans disbursed by the banking system remained steady at RM101.5 billion in May compared to RM101.6 billion in the previous month. — Reuters pic

KUALA LUMPUR, June 28 — Banks in Malaysia have maintained sufficient liquidity to support intermediation and meet urgent needs, Bank Negara Malaysia (BNM) said.

The banking system’s liquidity coverage ratio (LCR) stood at 155.2 per cent in May from 159.9 per cent in April due to lower placements with BNM, it said.

“Funding profile of the banks remained stable. The loan to fund ratio and the loan to fund and equity ratio stood at 82.2 per cent and 71.8 per cent, respectively,” the central bank said in its “Monthly Highlights — May 2019” report released today.

It said net financing — outstanding loans excluding those of development financial institutions — and outstanding corporate bonds grew by 6.3 per cent in May compared to 5.1 per cent in April, driven mainly by higher outstanding corporate bond growth amid sustained growth in outstanding loans.

“Higher bond issuance in May was mainly in the finance, insurance, real estate and business services sector,” it said.

BNM said total loans disbursed by the banking system remained steady at RM101.5 billion in May compared to RM101.6 billion in the previous month and was significantly higher than the historical monthly average of RM93.0 billion.

“Outstanding business loans and household loans grew by 3.4 per cent and 5.3 per cent, respectively, in May from 3.2 per cent and 5.2 per cent, respectively, in April,” it said.

Meanwhile, the central bank said the domestic financial markets experienced non-resident portfolio outflows, driven by cautious investor sentiments against the backdrop of escalating global trade tensions.

“As a result, the ringgit depreciated by 1.5 per cent against the US dollar in line with most regional currencies which depreciated between 0.5 per cent and 2.2 per cent and the 10-year Malaysian Government Securities yield increased marginally by 0.4 basis points,” it said.

BNM said the FTSE Bursa Malaysia KLCI, however, gained 0.5 per cent driven by the strong corporate earnings performance across various sectors.

“Investor sentiments were also supported by upgrades to the outlook for the Malaysian equity market,” it added. — Bernama

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