Bank Negara: Banks well-positioned to face macroeconomic, financial shocks

In its ‘Monthly Highlights — September 2019’ released today, the central bank said during the month, net financing growth was sustained at 5.2 per cent compared to the previous month. — Picture by Yusof Mat Isa
In its ‘Monthly Highlights — September 2019’ released today, the central bank said during the month, net financing growth was sustained at 5.2 per cent compared to the previous month. — Picture by Yusof Mat Isa

KUALA LUMPUR, Oct 31 — Banking institutions are well-positioned to withstand severe macroeconomic and financial shocks, with excess capital buffers of about RM110 billion as at September 2019, says Bank Negara Malaysia (BNM).

In its “Monthly Highlights — September 2019” released today, the central bank said during the month, net financing growth was sustained at 5.2 per cent compared to the previous month, amid sustained growth in outstanding corporate bonds (September, August: 9.0 per cent) and outstanding loans (September: 3.8 per cent, August: 3.9 per cent)  across the business and household segments.

Overall, total loans disbursed by the banking system moderated to RM99.5 billion compared to RM101.4 billion in August.

However, it remained higher than the historical monthly average of RM93.0 billion.

“The moderation from August was mainly in disbursements to households, particularly for the purchase of securities and residential properties,” said BNM.

It said early in the month, signs of progress in global trade talks contributed to improved investor sentiment, leading to broad gains across financial market indicators.

However, sentiment deteriorated towards the end of September as investors turned cautious from heightened concerns over the global growth outlook and a potential escalation in global trade disputes, said the central bank.

Overall, the domestic financial markets continued to be affected by global developments and shifts in investor sentiment in September, said the central bank.

The ringgit appreciated by 0.8 per cent against the US dollar, driven by net portfolio inflows by non-residents during the month.

“Adjustments in domestic bond yields were also marginal amid sustained demand by non-resident investors,” BNM added.

Meanwhile, the domestic equity market continued to be affected by global uncertainties with the FBM KLCI declining by 1.8 per cent during the month. — Bernama

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