Malaysia Banking Industry Report - H2, 2012
Malaysia’s GDP grew by 5.4% in the second quarter of fiscal year 2012, backed by reviving exports. Banking industry followed its growth trend, too, after the economic crises of 2008-2009. There was double digit growth in assets and loans, as well as deposits, of Malaysian banks in the first half of 2012.
Loans for purchase of residential property dominated the portfolios of most banks followed by transport vehicle loans. Rising per capita income and growing urbanization in the country is driving loan growth in these two segments. Fixed deposits and investment deposits continued to dominate total deposits in banks. More than half of the deposits were in these two segments. Tax rebates and lower risk drove customers to these segments. The banking system remained stable with ample liquidity to meet demand for deposit withdrawals and other liquidity obligations. The overnight policy rate of central bank has remained stable for a while now. The banking system in Malaysia has perhaps again entered a period of stability following crises requiring minimal intervention by the central bank.
Though pre-tax profit of Malaysian commercial banks is experiencing double digit growth, the net interest income growth has been subdued. Hence, the banks are promoting fee based products and services to enhance their profitability. The capital adequacy of Malaysian banks remained strong as of June 2012. Both core-capital and risk weighted capital remained at sufficiently higher levels than prescribed by Bank Negara Malaysia (BNM): Malaysian banks are striving to achieve the capital requirements prescribed in the Basel III requirements. Net non-performing loan ratio has also shown a successive quarterly decline, thereby showing the strength of the banking system.
The outlook for Malaysian banking is positive owing to consistent GDP growth and rising per capita income in the country. The emergence of Malaysia as an Islamic banking hub will add further to the growth of this sector.
Key Points:
Loans for purchase of residential property dominated the portfolios of most banks followed by transport vehicle loans. Rising per capita income and growing urbanization in the country is driving loan growth in these two segments. Fixed deposits and investment deposits continued to dominate total deposits in banks. More than half of the deposits were in these two segments. Tax rebates and lower risk drove customers to these segments. The banking system remained stable with ample liquidity to meet demand for deposit withdrawals and other liquidity obligations. The overnight policy rate of central bank has remained stable for a while now. The banking system in Malaysia has perhaps again entered a period of stability following crises requiring minimal intervention by the central bank.
Though pre-tax profit of Malaysian commercial banks is experiencing double digit growth, the net interest income growth has been subdued. Hence, the banks are promoting fee based products and services to enhance their profitability. The capital adequacy of Malaysian banks remained strong as of June 2012. Both core-capital and risk weighted capital remained at sufficiently higher levels than prescribed by Bank Negara Malaysia (BNM): Malaysian banks are striving to achieve the capital requirements prescribed in the Basel III requirements. Net non-performing loan ratio has also shown a successive quarterly decline, thereby showing the strength of the banking system.
The outlook for Malaysian banking is positive owing to consistent GDP growth and rising per capita income in the country. The emergence of Malaysia as an Islamic banking hub will add further to the growth of this sector.
Key Points:
- As of August 2012, total assets held by banking institutions in Malaysia amounted to MYR 1,883bn, an increase of 11.5% compared to the same period last year.
- Loan disbursal followed its long term growth trend in the first half of 2012. Total loans disbursed by commercial banks grew by 11.1% in June 2012.
- As of June 2012, total deposits of the banking system grew by 12.6% year on year to reach MYR 1,360bn. The bulk of the deposits were in fixed deposits, investment deposits and demand deposits.
- Bank Negara Malaysia (BNM) raised the overnight policy rate by 25 basis points in May 2011. Since then, it has remained stable at 3%.
1. INDUSTRY PROFILE
1.1 Sector overview
1.2 Sector size
1.2.1 Total assets
1.2.2 Total loans and deposits
1.2.3 Interest rates
1.3 Sector performance
1.3.1 Banking institutions financial performance
1.3.2 Capital adequacy ratio
1.3.3 Non performing loans
2. MARKET TRENDS AND OUTLOOK
2.1 Key economic indicators-Malaysia
2.2 Islamic banking
2.3 The financial sector master plan (2011-20)
3. LEADING PLAYERS AND COMPARATIVE MATRIX
3.1 Leading players
3.1.1 Malayan Banking Berhad
3.1.2 Public Bank Berhad (Public Bank)
3.1.3 CIMB Group Holdings Berhad
3.1.4 RHB Capital Berhad
3.2 Comparative matrix
3.3 SWOT analysis
4. TABLES & CHARTS
Table 1: List of licensed banks in Malaysia
Table 2: Interest rates in Malaysia
Table 3: Capital constituents of Malaysian banking system
Table 4: Malaysia-Key economic indicators
Table 5: Nine focus areas of the master plan
Table 6: Key ratios of Maybank
Table 7: Key Ratios of CIMB Group
Table 8: Comparative Matrix
Chart 1: Office network of Malaysian banking institutions
Chart 2: Number of licensed banking institutions in Malaysia by type
Chart 3: Assets distribution of banking system according to bank type
Chart 4: Share of major Malaysian commercial banks in terms of asset size
Chart 5: Total loans of banking system
Chart 6: Distribution of loans approved by purpose (USD)
Chart 7: Distribution of loans approved by sector
Chart 8: Loan approval by sectors-2012
Chart 9: Distribution of loans disbursed by sector
Chart 10: Loan disbursal by sectors
Chart 11: Loan applications received by banking system
Chart 12: Loan applications vs. loan approvals
Chart 13: Banking system's total deposit distribution as of June 2012
Chart 14: Banking system's deposit
Chart 15: Deposits distribution of banking system by holder type
Chart 16: Loan to deposit ratio and financing to deposit ratio
Chart 17: Overnight policy rate in Malaysia
Chart 18: Pre-tax profit and net interest income of commercial banks
Chart 19: Pre-tax profit of merchant banks
Chart 20: Capital adequacy ratio of Malaysian banking system
Chart 21: Capital adequacy ratio of commercial and Islamic banks
Chart 22: Capital adequacy ratio of investment banks
Chart 23: Net NPL ratio
Chart 24: NPL ratios by type of bank
Chart 25: NPL by purpose
Chart 26: NPL by sector
Chart 27: Malaysia- Quarterly GDP growth rate
Chart 28: Malaysia- Exports
Chart 29: GDP- By sector
Chart 30: Malaysian Islamic banking assets
Chart 31: Market share of major Islamic banks
Chart 32: Maybank Shareholding
Chart 33: Loan portfolio of Maybank
Chart 34: Public bank Shareholding
Chart 35: Revenue contribution by business segments
Chart 36: Net interest margin of Public bank
Chart 37: CIMB Group Shareholding
Chart 38: Loan portfolio of CIMB Group by country
Chart 39: RHB Bank Shareholding
Chart 40: Loan portfolio of RHB by purpose
Chart 41: Gross impaired loan ratio of RHB
Chart 42: Latest share prices of major banks
1.1 Sector overview
1.2 Sector size
1.2.1 Total assets
1.2.2 Total loans and deposits
1.2.3 Interest rates
1.3 Sector performance
1.3.1 Banking institutions financial performance
1.3.2 Capital adequacy ratio
1.3.3 Non performing loans
2. MARKET TRENDS AND OUTLOOK
2.1 Key economic indicators-Malaysia
2.2 Islamic banking
2.3 The financial sector master plan (2011-20)
3. LEADING PLAYERS AND COMPARATIVE MATRIX
3.1 Leading players
3.1.1 Malayan Banking Berhad
3.1.2 Public Bank Berhad (Public Bank)
3.1.3 CIMB Group Holdings Berhad
3.1.4 RHB Capital Berhad
3.2 Comparative matrix
3.3 SWOT analysis
4. TABLES & CHARTS
Table 1: List of licensed banks in Malaysia
Table 2: Interest rates in Malaysia
Table 3: Capital constituents of Malaysian banking system
Table 4: Malaysia-Key economic indicators
Table 5: Nine focus areas of the master plan
Table 6: Key ratios of Maybank
Table 7: Key Ratios of CIMB Group
Table 8: Comparative Matrix
Chart 1: Office network of Malaysian banking institutions
Chart 2: Number of licensed banking institutions in Malaysia by type
Chart 3: Assets distribution of banking system according to bank type
Chart 4: Share of major Malaysian commercial banks in terms of asset size
Chart 5: Total loans of banking system
Chart 6: Distribution of loans approved by purpose (USD)
Chart 7: Distribution of loans approved by sector
Chart 8: Loan approval by sectors-2012
Chart 9: Distribution of loans disbursed by sector
Chart 10: Loan disbursal by sectors
Chart 11: Loan applications received by banking system
Chart 12: Loan applications vs. loan approvals
Chart 13: Banking system's total deposit distribution as of June 2012
Chart 14: Banking system's deposit
Chart 15: Deposits distribution of banking system by holder type
Chart 16: Loan to deposit ratio and financing to deposit ratio
Chart 17: Overnight policy rate in Malaysia
Chart 18: Pre-tax profit and net interest income of commercial banks
Chart 19: Pre-tax profit of merchant banks
Chart 20: Capital adequacy ratio of Malaysian banking system
Chart 21: Capital adequacy ratio of commercial and Islamic banks
Chart 22: Capital adequacy ratio of investment banks
Chart 23: Net NPL ratio
Chart 24: NPL ratios by type of bank
Chart 25: NPL by purpose
Chart 26: NPL by sector
Chart 27: Malaysia- Quarterly GDP growth rate
Chart 28: Malaysia- Exports
Chart 29: GDP- By sector
Chart 30: Malaysian Islamic banking assets
Chart 31: Market share of major Islamic banks
Chart 32: Maybank Shareholding
Chart 33: Loan portfolio of Maybank
Chart 34: Public bank Shareholding
Chart 35: Revenue contribution by business segments
Chart 36: Net interest margin of Public bank
Chart 37: CIMB Group Shareholding
Chart 38: Loan portfolio of CIMB Group by country
Chart 39: RHB Bank Shareholding
Chart 40: Loan portfolio of RHB by purpose
Chart 41: Gross impaired loan ratio of RHB
Chart 42: Latest share prices of major banks
