Economic Report 2013/2014: Pace of credit growth moderates in first 8 months

by **Cals** Sat 26 Oct 2013, 21:08

Published: Saturday October 26, 2013 MYT 12:00:00 AM
Updated: Saturday October 26, 2013 MYT 9:25:58 AM
Economic Report 2013/2014: Pace of credit growth moderates in first 8 months

CREDIT growth in the banking system continued, albeit at a more moderate pace, during the first eight months of 2013. Loan applications increased 0.5% to RM535.6bil while loan approvals declined 1.4% to RM261bil (January - August 2012: 7.5%, RM533bil; -0.3%, RM264.6bil),
During the same period, loan disbursements grew 0.7% to RM619.2bil (January-August 2012: 17.5%; RM614.6bil). Total loans outstanding in the banking system expanded 9.3% to RM1,180.3bil as at end-August 2013 (end-2012: 10.4%; RM1,108bil).
Lending to businesses moderated during the first eight months. Loan applications by businesses dropped 12.5% to RM236.7bil, while approvals fell 20.5% to RM103.8bil (January-August 2012: 15%, RM270.4bil; 4%, RM130.6bil).
Likewise, disbursements to businesses slowed 3.8% to RM421.5bil (January-August 2012: 26.9%; RM437.9bil).
The largest portion of loans disbursed to businesses was to the manufacturing sector at 20.9%; followed by the wholesale and retail trade, accommodation and restaurant sector at 19.2%; the finance, insurance and business services sector at 7.2%; and the construction sector at 6.6%.

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Total business loans outstanding grew 7.7% to RM440.8bil as at end-August (end-2012: 10.9%; RM419.1bil).
Financing to small and medium enterprises (SMEs) was also moderate during the first eight months of 2013.
Loan applications grew 3.5% to RM128.2bil while approvals eased 12.9% to RM47.7bil (January-August 2012: 13%, RM123.8bil; 14.5%, RM54.8bil).
During the period, the finance, insurance and business services sector received the largest share of loans with 27.7%, followed by the wholesale and retail trade, accommodation and restaurant sector with 25.8% while the manufacturing sector accounted for 19.4%.