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Banks expected to record 8pc loan growth [23-11-2011]  
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Chief executive officer Datuk Seri Abdul Wahid Omar said the moderate loan growth "is still reasonable", fuelled by loan demand from the Economic Transformation Programme projects.

"I think next year with the ETP projects, a lot of funding is required and we are ready to support it," Wahid said after a zakat handing over ceremony here yesterday.

He said Maybank will continue to support the economy and ensure funding is available to productive sectors.

He noted that the industry's loan growth was typically at one-and-a-half to twice the country's gross domestic product (GDP) growth.

Maybank has forecast the country's GDP to be at around 3.8-4 per cent next year.

"So, if you are looking at say 4 per cent GDP growth, we are looking at an industry loan growth of around 8 per cent, which is still reasonable within the context of the overall economy," he said.

Wahid also lauded Bank Negara's new loan guidelines to protect loan applicants, describing them as a timely and pre-emptive move to prevent household debts in the country from going out of hand.

He said the current ratio of household debt to GDP at 77 per cent was still not too high but was better for the central bank to jump in early before the situation gets worse.

"It is best for Bank Negara to come in early and make sure that all the financial institutions, non-bank financial institutions as well as cooperatives play their part so that we all lend our money responsibly," he said.

Starting January 1 next year, Bank Negara will be enforcing new guidelines for home and vehicle financing, credit and charge cards, personal financing including overdraft facilities as well as financing for the purchase of securities, except for share margin financing, which comes under stock exchange rules.

Wahid said the move would also increase the quality of debt repayments which in turn would increase the bank's net income.

"We are looking at overall repayment capacity. Viewed from the gross perspective, the percentage would be lower but looking at the net income, the proportion of debt servicing would be higher," he said.

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