BNM: Banking system remains strong, RWCR at 14.9%

KUALA LUMPUR (Jan 31): Bank Negara Malaysia (BNM) said the
banking system capitalisation remained strong in December, 2011 with
the risk-weighted capital ratio (RWCR) and core capital ratio (CCR) at
14.9% and 12.9% respectively.
In a statement issued on Tuesday, the central bank said the level of net
impaired loans improved amounting to 1.8% of net loans, while the loan
loss coverage ratio remained high at 99.6%.
In its monetary and financial developments for December, 2011, it said
interbank rates were stable in December.
“In terms of retail rates, the average base lending rate (BLR) of
commercial banks moderated slightly to 6.53% as at end-December.
Retail deposit rates were stable,” it said.
BNM said broad money (M3) increased at a higher annual rate of 14.4% in December, mainly due to a rise in credit extended
by the banking system to the private sector and higher capital inflows.
As for net financing to the private sector, it rose at a slower pace in December due mainly to lower net private debt security
(PDS) issuances.
The outstanding banking system loans, however, expanded by 13.6% during the month with a higher amount of loans being
extended to businesses in the wholesale and retail, restaurants and hotels; manufacturing; transport, storage and
communication and real estate sectors.
“Loan growth to households also rose significantly during the month due mainly to the base effect of lower loans extended for
the purchase of passenger cars during the same period in 2010. Loan demand remained strong with higher loan applications
from both the business and household sectors,” the central bank said.
On the ringgit, it said the local unit ringgit depreciated against the US dollar, Chinese renminbi and Japanese yen, but
strengthened against the euro and Singapore dollar. The ringgit's depreciation against the US dollar was in line with most
regional currencies.
In January, the ringgit broadly appreciated against the currencies of Malaysia's major trading partners.
BNM’s international reserves were at RM423.5 billion (US$133.7 billion) as at Jan 13, 2012, which was sufficient to finance
9.6 months of retained imports and was four times the short-term external debt.