Malaysia Banks Outlook 2011: Rising Household Debt May Hurt Consumer Credit Quality May 11
- ID: 1806255
- May 2011
- Region: Malaysia
- Standard & Poors
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:
- 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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