Malaysia Banks Outlook 2011: Rising Household Debt May Hurt Consumer Credit Quality May 11
Standard & Poors, May 2011
Abstract
The banking system is stable with a traditional commercial banking focus. Rising interest rates are unlikely to ease margin pressures. Rising household indebtedness may undermine consumer credit quality. Domestic competition is prompting mergers and overseas expansion. Malaysian banks have a stable financial profile, underpinned by their focus as traditional commercial banks with generally prudent risk appetites. Profitability of the banking sector, as measured by return on assets, improved to 1.5% as at Dec. 31, 2010, from 1.2% in 2009, driven primarily by lower credit costs, and to a lesser extent, wider net interest margin. The system's net nonperforming loan ratio increased slightly to 2.3% as at Dec. 31, 2010, from 1.8% the year before. However, this is predominantly attributable to...
Companies mentioned in this report are:
- Malaysia
- Malayan Banking Bhd.
- Public Bank Bhd.
- RHB Bank Bhd.
- Hong Leong Bank Bhd. (Unsolicited Ratings)
- CIMB Group Holding Bhd.
- AmBank (M) Bhd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
- Malaysia
- Malayan Banking Bhd.
- Public Bank Bhd.
- RHB Bank Bhd.
- Hong Leong Bank Bhd. (Unsolicited Ratings)
- CIMB Group Holding Bhd.
- AmBank (M) Bhd.
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