1 day Ago By S. BIRRUNTHA
KUALA LUMPUR: The banking sector's loan growth slowed to 5.2 per cent year-on-year (YoY) in Feb 2025, down from 5.7 per cent in Jan 2025, indicating a moderation in lending momentum.
Despite this, Maybank Investment Bank Bhd (Maybank IB) is maintaining its full-year industry loan growth forecast of 5.5 per cent, expecting a pickup in corporate lending to offset a more moderate expansion in household loans amid potential inflationary pressures.Maybank IB reiterated its 'positive' stance on the sector.
Meanwhile, the firm noted that household (HH) loan growth remained stable at six per cent year-on-year (YoY), while non-HH loan growth slowed to 4.1 per cent YoY from 5.1 per cent YoY in Jan 2025.
"On the non-HH front, construction lending was flat YoY, while working capital loan growth moderated to 3.6 per cent YoY at the end of Feb 2025, down from 5.4 per cent YoY at the end of Jan 2025.
"Within commercial property financing, lending for industrial buildings and factories remained robust, rising 12.8 per cent YoY in February 2025."Loans for land purchases expanded by 12.
2 per cent YoY, while shophouse loans increased by 5.4 per cent YoY," it said in a note today.Furthermore, the firm noted that loan applications, based on a three-month moving average (3MMA), moderated in Feb 2025, largely due to a slowdown in construction and working capital loan applications.
However, it said deposit growth remained stable, but tepid, at 3.3 per cent YoY at the end of Feb 2025, compared to 3.1 per cent YoY at the end of Jan 2025.
It added that current account savings account (CASA) growth improved to 4.1 per cent YoY, up from 3.2 per cent YoY at the end of Jan 2025.
Overall, Maybank IB said the banking sector's outlook would depend on broader economic conditions, with both upside and downside risks to the forecast.On the upside, a stronger-than-expected GDP performance could support higher loan demand and improve credit quality.At the same time, improved liquidity conditions could help sustain interest margins.
However, the firm noted that a weaker economy could lead to slower loan growth and potential asset quality concerns.Additionally, it said any interest rate cuts could compress interest margins, while a slowdown in CASA growth could intensify competition for deposits.© New Straits Times Press (M) Bhd.
