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BNM international reserves dip 0.8% to US$103.1 billion as at August 15

PETALING JAYA: Bank Negara Malaysia’s (BNM) international reserves amounted US$103.1 billion (RM431.01 billion) as at August 15, 2019, 0.8% dip from US$103.9 billion recorded as at July 31, 2019.

The central bank said in a statement that the reserves position is sufficient to finance 7.6 months of retained imports and is 1.1 time total short-term external debt.


AMMB kicks off FY20 with 12.6% increase in net profit

PETALING JAYA: AMMB Holdings Bhd’s net profit for the first quarter ended June 30, 2019 (Q1FY20) jumped 12.6% to RM391.46 million from RM347.59 million a year ago, underpinned by consistent net interest income (NII) growth, coupled with higher trading and insurance income.

Its revenue rose 10.1% to RM2.39 billion compared with RM2.17 billion in the previous year.

AmBank Group CEO Datuk Sulaiman Mohd Tahir (pix) said it recorded a higher return on equity at 8.8%.

“Total income rose 5.0% year-on-year from improved trading performance and better insurance income despite a subdued lending environment. At the same time, we continued to exert cost discipline with our cost-to-income (CTI) ratio further improving to 49.7%. This is a testament to our transformation strategy which has placed the group on a stronger footing to weather the more challenging operating landscape,” he said in a statement.

The bank’s NII increased 4.2% year-on-year (yoy), on the back of the expanded loans and deposits base. Non-interest income grew 6.4% to RM395.4 million, largely contributed by higher trading income and investment income from group treasury and markets and general insurance.

The group is now in the third year of its BET300 efficiency programme and continues to record cost savings which has allowed the group to re-invest some of these savings back into its strategic business streams as well as its digital capabilities and infrastructure.

It recorded a net recovery of RM32.5 million in Q1FY20 compared to an impairment charge of RM7.0 million in the previous year, mainly driven by a net write-back of provision for corporate loans. The group’s gross impaired loan ratio stood at 1.66% (FY19: 1.59%), with loan loss cover at 111.5%.

Gross loans increased 2.5% yoy, though contracted 1.0% year-to-date (YTD) to RM100.8 billion, mainly due to corporate loan repayments and decline in auto loans.

Total customer deposits stood at RM102.8 billion, an increase of 4.2% YoY but down 3.9% YTD. The group’s current accounts and savings accounts (CASA) stood at RM23.1 billion, with CASA mix at 22.5%.

AMMB said the group’s capital position is adequate with common equity tier-1 ratio at 11.9% and total capital ratio at 15.4%.

Sulaiman said while the policy rate is expected to remain unchanged at 3% for the rest of the year, there is still room for BNM to reduce the overnight policy rate by 25 basis points in 2H2019 in a move to support domestic demand and in tandem with global monetary policy. In tandem with a moderate economic outlook, the banking system loans growth is envisaged to grow around 4.6%.

He said as part of its digital roadmap, AMMB will be rolling out more digital initiatives that provide a competitive edge and at the same time benefit customers.


AMMB Q1 net profit up 12.6%

PETALING JAYA: AMMB Holdings Bhd’s net profit for the first quarter ended June 30, 2019 (Q1FY20) jumped 12.6% to RM391.46 million from RM347.59 million a year ago, underpinned by consistent net interest income (NII) growth, coupled with higher trading and insurance income.

Its revenue rose 10.1% to RM2.39 billion compared with RM2.17 billion in the previous year.

AmBank Group CEO Datuk Sulaiman Mohd Tahir (pix) said it recorded a higher return on equity at 8.8%.

“Total income rose 5.0% year-on-year from improved trading performance and better insurance income despite a subdued lending environment. At the same time, we continued to exert cost discipline with our cost-to-income (CTI) ratio further improving to 49.7%. This is a testament to our transformation strategy which has placed the group on a stronger footing to weather the more challenging operating landscape,” he said in a statement.

The bank’s NII increased 4.2% year-on-year (yoy), on the back of the expanded loans and deposits base. Non-interest income grew 6.4% to RM395.4 million, largely contributed by higher trading income and investment income from group treasury and markets and general insurance.

The group is now in the third year of its BET300 efficiency programme and continues to record cost savings which has allowed the group to re-invest some of these savings back into its strategic business streams as well as its digital capabilities and infrastructure.

It recorded a net recovery of RM32.5 million in Q1FY20 compared to an impairment charge of RM7.0 million in the previous year, mainly driven by a net write-back of provision for corporate loans. The group’s gross impaired loan ratio stood at 1.66% (FY19: 1.59%), with loan loss cover at 111.5%.

Gross loans increased 2.5% yoy, though contracted 1.0% year-to-date (YTD) to RM100.8 billion, mainly due to corporate loan repayments and decline in auto loans.

Total customer deposits stood at RM102.8 billion, an increase of 4.2% YoY but down 3.9% YTD. The group’s current accounts and savings accounts (CASA) stood at RM23.1 billion, with CASA mix at 22.5%.

AMMB said the group’s capital position is adequate with common equity tier-1 ratio at 11.9% and total capital ratio at 15.4%.

Sulaiman said while the policy rate is expected to remain unchanged at 3% for the rest of the year, there is still room for BNM to reduce the overnight policy rate by 25 basis points in 2H2019 in a move to support domestic demand and in tandem with global monetary policy. In tandem with a moderate economic outlook, the banking system loans growth is envisaged to grow around 4.6%.

He said as part of its digital roadmap, AMMB will be rolling out more digital initiatives that provide a competitive edge and at the same time benefit customers.


Affordable Home Fund eligibility criteria expanded

PETALING JAYA: Bank Negara Malaysia (BNM) has expanded the eligibility criteria for the RM1 billion Fund for Affordable Homes.

Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus said the maximum monthly household income for applicants is increased to RM4,360, from RM2,300 previously.

The maximum property price is also increased to RM300,000, from RM150,000 previously, in line with the definition of affordable house in the National Affordable Housing Policy.

The enhancement will take effect on Sept 1, 2019.

The Fund for Affordable Homes is restricted to residential properties in the primary market only with financing rate of up to 3.5% per annum.

The financing tenure is up to 40 years or up to age 70, whichever is shorter.

Launched earlier in January this year, the fund aims to help home buyers from the lower income group to finance the purchase of their first homes.

Meanwhile, BNM also announced the establishment of Khidmat Nasihat Pembiayaan (MyKNP). This is a joint collaboration by BNM, Credit Guarantee Corp Malaysia Bhd (CGC) and Credit Counselling and Debt Management Agency (AKPK), with the support of the financial industry.

MyKNP is another collective effort by the industry to enhance the financing ecosystem. It aims to improve financing applicants’ experience, including providing greater understanding of the factors affecting their financing application as well as help in raising their eligibility for future financing.

Applicants who have been unsuccessful in securing SME financing or home financing can contact MyKNP @ CGC and AKPK respectively, and obtain, for free, further clarification on the reasons for rejection by financial institutions.

The public can also get advice on how to improve eligibility for financing in the future and information on alternative financing (for SMEs) or alternative solutions (for homebuyers).


Bank Negara expands eligibility criteria for RM1b affordable homes fund

KUALA LUMPUR, Aug 21 — Bank Negara Malaysia has expanded the eligibility criteria for its RM1 billion Fund for Affordable Homes. Announcing the enhancement, governor Datuk Nor Shamsiah Mohd Yunus said the maximum monthly household income is now…


Free financial advisory services launched for SMEs and home buyers

KUALA LUMPUR, Aug 21 — Bank Negara Malaysia (BNM) has launched a free financial advisory and recommendations services for small and medium enterprises and home buyers who were unsuccessful in obtaining financing from banks. Governor Datuk Nor…


RHB Bank: Downside risks to economy not significant, no recession in sight

KUALA LUMPUR, Aug 19 — There will be downside risks to Malaysia’s economy in 2019 after recording stronger gross domestic product (GDP) in the second quarter (Q2), but a recession is not in sight, said RHB Bank in its economic view…


Cautious outlook for Malaysian economy despite stronger Q2 growth

KUALA LUMPUR: Malaysia’s gross domestic product (GDP) growth in 2019, which may be lower by 0.1 percentage point (ppt) if there is a further escalation in the US-China trade war, will still be “manageable”, said Socio-Economic Research Centre (SERC) executive director Lee Heng Guie.

He said despite the economy growing 4.7% in the first half of 2019, Bank Negara Malaysia (BNM) still wants to maintain its cautiousness.

“There are still a lot of risks ahead, and this trade war effect could have more impact, also possibly lag effect, going into next year. It’s good to be cautious in the assessment of the economy, at least the government can be well prepared for the risks,” he told SunBiz.

BNM sees lower downside risks for Malaysia this year in its latest assessment of the US-China trade war due mainly to the delay in the implementation of selected tariffs.

“Should the trade dispute escalate further, global growth is expected to be lower by 0.1ppt. Consequently, Malaysia’s GDP growth will be lowered by 0.1ppt in 2019 due to lower trade income and investment activity,” BNM governor Datuk Nor Shamsiah Mohd Yunus said when announcing Malaysia’s second quarter (Q2’19) GDP growth figures last Friday.

Further escalation of trade tensions will weigh on growth outlook, with the central bank also estimating that Malaysia’s exports may be lower by 0.2ppt this year, as global trade is projected to shrink by 0.1ppt.

In its Q318 Quarterly Bulletin, BNM warned that Malaysia’s 2019 GDP could be much lower by 0.9 to 1.1ppt, while exports could be lower by 1.2 to 1.7ppt.

However, BNM is maintaining its projection for the Malaysian economy to grow between 4.3% and 4.8% this year.

“Going into second half 2019, we believe that growth will still be challenging and SERC is keeping our full-year GDP growth estimate of 4.5-4.7%. We’re not expecting a global recession but global growth will still be a key risk for next year,” said Lee.

Malaysia’s economy grew at a stronger pace of 4.9% in Q2’19, from 4.5% in the first quarter, supported, by higher household spending and private investment.

Meanwhile, UOB also remained cautious given escalating external risks. Key risks to its growth outlook include a more pronounced global slowdown, breakdown in US-China trade talks with further tariffs and retaliatory actions, and a no-deal Brexit. It is maintaining its GDP growth forecast of 4.6% for 2019.

“We think BNM is less likely to pursue another rate cut in the upcoming MPC meeting des-pite the recent synchronised rate reductions by four Asia-Pacific central banks last week. BNM has already made one pre-emptive 25bps cut in May and is likely to wait for the outcome of US Fed rate deci-sion, US-China talks, and Malaysia’s Budget announce-ment,” UOB added.

Separately, RAM Ratings maintained its Malaysian GDP growth forecast at 4.6% for 2019 although external headwinds prevail. It said ongoing expectations of weaker economic prospects are envisaged to hamper capacity-building activities. Hence, its expectation for private investment activity this year stands at a moderate 2.2% (2018: 4.8%).

Going forward, it expects the policy stance to stay supportive of growth, with potentially looser monetary policy and fiscal buffers at the ready. Potential moves on the Overnight Policy Rate (OPR) are anticipated to be largely data-dependent, in response to signs of significant downside risks to growth.

“Accordingly, we have maintained our expectation of the OPR ending the year at 3.00%, albeit also of the view that there is scope for further loosening if required. Another factor that may support further easing is benign inflationary pressure that has prevailed.”


Bank Negara eases foreign exchange administration rules

KUALA LUMPUR: Bank Negara Malaysia (BNM) has announced further liberalisation of the foreign exchange administration (FEA) policy with new measures effective Aug 30, 2019 aimed at providing greater flexibility and efficiency for businesses to manage their foreign exchange risk and conduct their daily operations.

Firstly, residents can hedge their foreign currency current account obligations up to their underlying tenure, compared with up to 12 months previously.

Secondly, resident treasury centres can hedge on behalf of their related entities, while non-resident treasury centres can hedge on behalf of their related entities upon a one-time registration with BNM, compared with required approval previously.

‌Thirdly, non-residents can hedge on anticipatory basis, compared with required approval previously.

Fourthly, BNM has revised the definition of domestic ringgit borrowing by exempting credit facilities for miscellaneous expenses.

On another note, governor Datuk Nor Shamsiah Mohd Yunus said BNM has had “positive engagements” with global index provider FTSE Russell.

“They (FTSE Russell) were appreciative of the measures we’ve put in place to deepen the onshore market,“ she told reporters after announcing the second quarter’s gross domestic product growth last Friday.

She said the new measures seek to deepen the onshore foreign exchange market to provide investors the flexibility to undertake hedging.

In April, FTSE Russell said it may drop Malaysian debt from the FTSE World Government Bond Index due to concern about market liquidity. The review is due in September.


BNM in “positive engagements” with FTSE Russell

KUALA LUMPUR: Bank Negara Malaysia has had “positive engagements” with global index provider FTSE Russell, said BNM governor Datuk Nor Shamsiah Mohd Yunus.

“They (FTSE Russell) were appreciative of the measures we’ve put in place to deepen the onshore market,“ she told a press conference after announcing the second quarter’s gross domestic product growth here today.

She added that the new measures announced today seeks to deepen the onshore foreign exchange market so that investors have the flexibility to undertake hedging requirements.

In April, FTSE Russell said it may drop Malaysian debt from the FTSE World Government Bond Index due to concern about market liquidity.

The review is due in September.