ID :
32994
Sat, 11/29/2008 - 22:26
Auther :
Shortlink :
https://oananews.org//node/32994
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BANKING SECTOR & FINANCIAL SYSTEM IN STRONGER POSITION TO FACE CHALLENGES
KUALA LUMPUR, Nov 29 (Bernama) -- Malaysia's banking sector and financial system are in a much stronger position to face the challenges today compared to a decade ago, according to the Malaysian Investment Banking Association (MIBA).
Its chairman Azman Hashim said amid the high liquidity condition in the
domestic financial system and well-capitalised banking institutions, the
domestic banking sector could continue to function effectively to support
economic activities.
"However, we must recognise that there are high risks associated with the
current global financial crisis," Azman said during the MIBA annual dinner here
Friday.
"We should therefore consider expansionary fiscal and monetary policies to
help stimulate domestic demand," he said.
According to Azman, the domestic banking industry has continued to perform
well despite the financial crisis which erupted in the United States and has now
spread across the globe.
For the core banking groups, the first half-year profits saw a high
double-digit growth of 32.9 percent to RM10.9 billion on the back of a firmer
asset growth of 10.8 percent and an improved loan quality, he said.
The net non-performing loan ratio as at end-June was at 2.6 percent and it
has narrowed further to a 10-year low of 2.4 percent as at
end-September.
"The sector was also capitalised as measured by the risk weighted capital
adequacy ratio (RWCR) which rose to 13 percent in September. This is above the
Basel minimum level of eight percent," Azman said.
The investment banking sector saw a negative asset growth of RM14.983
billion or 18.7 percent as compared to end-June 2007, he said.
However, despite the depressing capital market condition as a result of the
global financial crisis, the first nine months of this year saw a total of
RM49.7 billion (US$13.6 billion) raised through the equity and private debt
markets, Azman said.
He said the amount of gross funds raised through private debt securities
was also higher at RM44.7 billion (US$12.2 billion) compared with RM38 billion
(US$10.4 billion) in the same period last year.
"This includes funds raised through the Islamic capital, which increased to
RM6 billion (US$1.6 billion) in the first nine months of this year, reflecting
the increased prominence of Islamic finance as a source of financing," he added.
Azman said the current global financial turmoil raised exciting prospects
for the rapid expansion and growth of Islamic finance in the international
arena.
"We believe the domestic demand momentum will remain encouraging amid an
expansionary public spending policy, thus enabling the overall economy to expand
at the three to four percent range in 2009," he said.
"We also welcome the recent decisions by Bank Negara Malaysia to reduce the
overnight policy rate by 0.25 percent to 3.25 percent and the statutory reserve
requirement by 0.5 percent to 3.5 percent to help lower borrowing costs," he
added.
-- BERNAMA
Its chairman Azman Hashim said amid the high liquidity condition in the
domestic financial system and well-capitalised banking institutions, the
domestic banking sector could continue to function effectively to support
economic activities.
"However, we must recognise that there are high risks associated with the
current global financial crisis," Azman said during the MIBA annual dinner here
Friday.
"We should therefore consider expansionary fiscal and monetary policies to
help stimulate domestic demand," he said.
According to Azman, the domestic banking industry has continued to perform
well despite the financial crisis which erupted in the United States and has now
spread across the globe.
For the core banking groups, the first half-year profits saw a high
double-digit growth of 32.9 percent to RM10.9 billion on the back of a firmer
asset growth of 10.8 percent and an improved loan quality, he said.
The net non-performing loan ratio as at end-June was at 2.6 percent and it
has narrowed further to a 10-year low of 2.4 percent as at
end-September.
"The sector was also capitalised as measured by the risk weighted capital
adequacy ratio (RWCR) which rose to 13 percent in September. This is above the
Basel minimum level of eight percent," Azman said.
The investment banking sector saw a negative asset growth of RM14.983
billion or 18.7 percent as compared to end-June 2007, he said.
However, despite the depressing capital market condition as a result of the
global financial crisis, the first nine months of this year saw a total of
RM49.7 billion (US$13.6 billion) raised through the equity and private debt
markets, Azman said.
He said the amount of gross funds raised through private debt securities
was also higher at RM44.7 billion (US$12.2 billion) compared with RM38 billion
(US$10.4 billion) in the same period last year.
"This includes funds raised through the Islamic capital, which increased to
RM6 billion (US$1.6 billion) in the first nine months of this year, reflecting
the increased prominence of Islamic finance as a source of financing," he added.
Azman said the current global financial turmoil raised exciting prospects
for the rapid expansion and growth of Islamic finance in the international
arena.
"We believe the domestic demand momentum will remain encouraging amid an
expansionary public spending policy, thus enabling the overall economy to expand
at the three to four percent range in 2009," he said.
"We also welcome the recent decisions by Bank Negara Malaysia to reduce the
overnight policy rate by 0.25 percent to 3.25 percent and the statutory reserve
requirement by 0.5 percent to 3.5 percent to help lower borrowing costs," he
added.
-- BERNAMA
