Malaysia faces growth amidst uncertainties
Domestic consumer and credit demand sustains performances of Malaysian banks against economic downturn, while regulatory initiatives are put in place to ensure sustainability of banking sector. January 19, 2012 | Wong Wei HanMalaysia’s economy has been going through a year marked by domestic uncertainties and external pressure. Compared to 2010, in which Malaysia saw its GDP growth rebound sharply to 7.2% from -1.7% in 2009 on the back of sustained government spending and domestic demand, 2011 proves to be less than encouraging as deteriorating global conditions take a toll on Malaysia’s manufacturing output to moderate momentum of recovery. As a result, the economy is set to end 2011 in a low note, with forecast of both Nomura and the Asian Development Bank placing the full year GDP growth at 4.7%. Despite the decline in growth, Malaysia’s economy will be able to weather the current rough patches, holding its ground with the robust market fundamentals that the government has been putting in place since the 1997-1998 Asian Financial Crisis. Notable among these initiatives is the new Economic Transformation Programme (ETP), which encompasses as part of its plans the expansion of financial services, raising the sector’s total Gross National Income (GNI) contribution by $38.5 billion by 2020. Against this backdrop, major Malaysian banks have reflected the country’s resilience on the macroeconomic front, reporting sizable growth in asset size and net profits throughout the year. Unsurprisingly, Maybank once again stood out to secure its position as the country’s dominant player and one of the region’s leading financial institutions, with a 27% YoY net profit increase in the first half of 2011. The strong momentum continues into the quarter ending September, in which net profit surged by 25.1% YoY to $410 million from last year on the back of a 17.8% increase in the bank’s loans and advances, which is in turn generated by ETP projects and domestic consumption. CIMB and Public Bank have also recorded visible gains in the same quarter – CIMB posted record net profit growth of 10.5% YoY to $320 million as a result of improvements in consumer banking a... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
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