Loan growth holding up
Loan growth remained stable in Mar 2022, rising 4.6% YoY. This compares
against our industry loan growth forecast of 4.9% YoY for 2022, which we
maintain. CASA growth, however, continues to moderate, which does point
to potential NIM pressure in the coming months. POSITIVE maintained on
the sector with BUYs on HLBK, RHB, AMMB, ABMB, HLFG and BIMB.
Credit growth of 4.6%
Loans expanded at a steady pace of 4.6% YoY in March (4.7% YoY in Feb) –
household (HH) loan growth was a faster 4.9% YoY (4.7% YoY in Feb) but
non-HH loan growth moderated to 4.1% in Mar 2022 from 4.7% YoY in Feb 2022. Cumulative bond issuances in 3M22 totaled MYR20.4b vs MYR31.5b
in 3M21 (-35% YoY). Including bank loans, total industry credit growth was
also 4.6% YoY in Mar 2022.
Possibly slower loan growth ahead
Having expanded at a double-digit pace over the past four months, loan
applications slowed to +4.6% YoY in March 2022 from 12.4% YoY in Feb 2022.
On a 3-month moving average (3M MA) basis, loan application growth
slowed to 9% in March, after having expanded 17-20% over the past three
months. Positively, working capital loan applications on a 3M MA basis
remained robust, rising 25.9% YoY in March, this being the fourth
consecutive month of growth above 20%.
CASA growth continues to moderate
Deposit growth slowed to 4.6% in Mar 2022 from 6.0% YoY in Feb 2022.
CASA growth continued to moderate, rising just 6.4% YoY in March from
8.4% YoY in Feb 2022, this being the third month of single-digit growth.
Banks have generally been guiding for stable to a slight contraction in NIMs
this year, as low-cost funding tapers off. The industry’s CASA ratio was
unchanged at 31.9% end-Mar 2022.