Malaysia's private loans grew 5.5% in July

Growth of working capital loans drove up the number of business loans.

Loans extended to the private non-financial sector grew by 5.5% in July 2024, the same pace as in June, according to data from Bank Negara Malaysia (BNM).

Outstanding loan growth rose by 6.2% in July, faster than the 6% growth a month earlier. Corporate bonds grew by 3% in July.

For businesses, outstanding loan growth was 6% in July on the back of higher growth in working capital loans, particularly in the manufacturing and services sectors.

Household loan growth was 6.2% in July, the same as June, indicating a steady expansion in loans for the purchase of housing and cars, the BNM said.

“Loan applications were higher, reflecting the demand for financing amongst households,” the central bank said.

The banking system’s net impaired loans ratio of 1% for July 2024, the same as in June.

Loan loss coverage ratio is 124.5% of impaired loans, rising slightly from the 124.1% in June. Total provisions account for 1.4% of total loans held by the banking system.

Aggregate liquidity coverage ratio is 150.8% in July, falling from 155.1% in June.