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Over 250,000 Individuals & Businesses Have Been Aided By CIMB’s Programme

Since its debut on July 7, 2021, CIMB Bank Bhd and CIMB Islamic Bank Bhd have assisted over 250,000 individual and small and medium enterprise (SME) clients through the CIMB Payment Assistance Programme.

Customers were given other options to choose from under the scheme, according to the organisation, including a 50% decrease in instalments for six months on credit facilities like as mortgages, Amanah Saham Bumiputera (ASB) loans/financing, and variable rate credit facilities.

Aside from the Payment Assistance Program, CIMB underlined that during the term of assistance, it will not levy interest on interest, profit on profit (that is, compounding interest/profit), or penalty interest/late penalties.

Customers can also rest confident that any financial assistance they get will not affect their credit standing with the Central Credit Reference Information System (CCRIS).

CIMB had handled over 480,000 financial payment relief assistance applications for individual, SME, and business banking customers as of August 11, 2021, with some of them having resumed their monthly repayments.

This aid has a nearly 100% approval rate and includes the current Payment Assistance Program, Targeted Assistance Program, and Expanded Targeted Payment Assistance Program, all of which were offered to consumers in 2020, but not the blanket moratorium in March 2020.

 

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KUALA LUMPUR: CIMB Bank Bhd and CIMB Islamic Bank Bhd has supported over 250,000 individual and small and medium enterprise (SME) customers to-date under the CIMB Payment Assistance Programme since its launch on July 7, 2021.

In a statement today, the group said, under the programme, customers were given alternative options to choose from, such as a 50 per cent reduction in instalments for six months on credit facilities such as mortgages, Amanah Saham Bumiputera (ASB) loans/ financing, and variable rate credit facilities.

Customers can also opt for a three-month moratorium for hire purchase facilities while for credit cards, they can convert their outstanding balance into a three-year term loan/financing with reduced interest/profit rates to help them better manage their debt.

Besides the Payment Assistance Programme, CIMB reiterated that it would not charge interest on interest, or profit on profit (that is, compounding interest/profit), or any penalty interest/late charges during the period of assistance.

Customers are also assured that any financial assistance taken will not impact their Central Credit Reference Information System (CCRIS) status.

As at  Aug 11, 2021, CIMB has processed around 480,000 financial payment relief assistance applications for individual, SME and business banking customers, some of whom have resumed their monthly repayments.

This assistance has an approval rate of virtually 100 per cent and includes the current Payment Assistance Programme, Targeted Assistance Programme and Expanded Targeted Payment Assistance programme offered to customers in 2020, but excludes the blanket moratorium in March 2020.

 

Source: NST Online

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BNM – Malaysia’s GDP On Course To Grow At A Rate Of 6 To 7.5 Percent In 2021

BNM Governor Datuk Nor Shamsiah Mohd Yunus said the improvement in domestic demand and strong export performance, especially for electric and electronic products, fueled the development.

As a whole, Nor Shamsiah believes that improved global demand, continued policy support, and increased public and private sector spending would help the economy recover. The rebound will be visible in the labour market, with recruiting activity expected to steadily increase.

In the future, the governor expects that increased production from new and existing manufacturing facilities, as well as oil and gas facilities, would provide additional growth momentum.

The introduction of the COVID-19 vaccine is also expected to boost morale and aid economic recovery. The governor does agree, however, that the rate of recovery will be inconsistent across economic sectors.

MCO 3.0’s effect on growth will likely be less serious than MCO 1.0’s since almost all economic sectors will be able to operate.

Nor Shamsiah reiterated that the central bank’s GDP forecast range for this year takes into account the pandemic’s uncertainties, such as the potential for COVID-19 cases to resurface and tougher containment steps. In reality, BNM’s broad forecast range of 150 basis points, between 6% and 7.5 percent, reflects this uncertainty.

 

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BNM Governor Datuk Nor Shamsiah Mohd Yunus said the growth performance was mainly supported by the “improvement in domestic demand and robust exports performance, particularly for electric & electronic products”, reported The Sun Daily.

Overall, Nor Shamsiah expects the growth recovery to benefit from better global demand, continued policy support and increased public and private sector expenditure. The recovery will also be seen in the labour market conditions, hiring activity forecasted to increase gradually.

Looking ahead, the governor believes the higher production from new and existing manufacturing facilities as well as oil and gas facilities would provide further impetus for growth.

The roll-out of the COVID-19 vaccine is also expected to lift sentiments as well as contribute to economic recovery. The governor, however, acknowledge that the pace of recovery across economic sectors will be uneven.

“Going forward, Malaysia is well positioned to continue benefiting from stronger global economic and trade activities. While the growth outlook continues to be shaped by developments surrounding the pandemic, the implementation of containment measures which are mainly aimed at curbing social activities and allow almost all economic sectors to operate, would minimise the impact on economic activity,” said Nor Shamsiah during the central bank’s virtual briefing on the country’s Q1 2021 GDP performance.

With almost all economic sectors allowed to operate, MCO 3.0’s impact on growth will likely be less severe compared with last year’s MCO 1.0.

Nor Shamsiah reiterated that the central bank’s GDP forecast range for this year is mindful of the uncertainties brought about by the pandemic, such as the potential resurgence in COVID-19 cases and stricter containment measures. In fact, this uncertainty is evident in BNM’s wide forecast range of 150 bps, between 6% and 7.5%.

“Furthermore, the assumption behind the growth forecast was also conservative, as it had projected no interstate travel until the end of this year and Malaysia’s international borders will remain closed to leisure travel throughout 2021,” she explained as quoted by The Sun Daily.

 

Source: Property Guru

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Economic Growth Dependent On Vaccination & Virus Containment

AmBank Group Research has said the economy should recover in 2021 based on improving global gross domestic product (GDP) and trade, stimulus initiatives, the containment of the Covid-19 pandemic and the deployment of vaccines that will improve consumer and business sentiment.

Dr Anthony Dass, chief economist and head of research at AmBank, said that overall investment is expected to increase, and so are the major sectors of the economy.

“The increase in Covid-19 cases and the restrictive measures introduced in January will, however, dampen the upside to 2021 growth. It will be felt to be less impactful in 1Q21 (the first quarter of 2021) relative to the restrictive measures of April 2020. Nevertheless, we remain concerned about micro, small and medium-sized enterprises,” he said.

On that note, Dass reported that the GDP is likely to hover about 5.2 percent-5.9 percent in 2021 for the full year of 2021. Besides that, Dass said that the weak showing in the 4Q20 GDP that came in at -3.4 percent is within expectations when analyzing Malaysia’s GDP for 4Q20. The increasing number of Covid-19 cases and the restrictive steps that followed, he said, dragged it down.

The full-year GDP thus dropped by 5.6 percent, the worst since -7.4 percent in the Asian financial crisis of 1998.’ Private consumption and both private and public investment have been affected by the Covid-19 pandemic, followed by restrictive measures and domestic noise.

“In 4Q20, all industries, except construction, performed poorly, while net exports, manufacturing and public consumption supported growth,” he said.

Dass also stated a crucial point to remember is that the current account surplus of RM62.1 billion (4.4% of GDP) in 2020, supported by the goods account (RM139.1 billion) and narrower secondary income deficit, is the highest in nine years (RM2.7 billion).

 

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KUALA LUMPUR (Feb 15): AmBank Group Research said looking into 2021, the economy should recover, supported by improving global gross domestic product (GDP) and trade, stimulus measures, the Covid-19 pandemic’s containment and deployment of vaccines that will boost both consumer and business sentiments.

In a note today, AmBank chief economist and head of research Dr Anthony Dass said overall investments are expected to improve and so are the major economic sectors.

“Thus, capital expenditure expansion will take place in 2021.

“However, the upside to 2021 growth will be dampened by the rise in Covid-19 cases and restrictive measures imposed in January.

“It will be felt in 1Q21 (the first quarter of 2021) but less impactful compared to the April 2020 restrictive measures.

“Still, we remain concerned over the micro, small and midsize businesses,” he said.

On that note, Dass said for the full year of 2021, the GDP is likely to hover around 5.2%-5.9% in 2021.

Meanwhile, reviewing Malaysia’s GDP for 4Q20, Dass said the poor showing in 4Q20 GDP that came in at -3.4% is within expectations.

He said it was dragged by the rising number of Covid-19 cases and restrictive measures that ensued.

“Thus, the full-year GDP fell by 5.6%, the worst since -7.4% in the 1998 Asian financial crisis. The Covid-19 pandemic, followed by the restrictive measures and domestic noises impacted private consumption and both private and public investment.

“All sectors, except manufacturing, performed badly in 4Q20.

“Growth was supported by net exports, manufacturing and public consumption,” he said.

Dass said a key point to note is that the current account surplus of RM62.1 billion (4.4% of GDP) in 2020 is the highest in nine years — supported by goods account (RM139.1 billion) and narrower secondary income deficit (RM2.7 billion).

 

Source: Edge Prop

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BNM Defensive On The Direction Of The Overnight Policy Rate (OPR)

BNM Governor Datuk Nor Shamsiah Mohd Yunus, while speaking at a virtual press conference in conjunction with the release of economic data for the fourth quarter of 2020 (4Q20), stressed that the cumulative 125-base-point OPR slash in 2020 would continue to stimulate the domestic economy.

The statement she made implies that the central bank sees no need to cut interest rates to drive growth while continuing to analyze the economic scenario domestically and internationally. “To support economic growth, monetary policy will remain accommodative,” she told the media.

Nor Shamsiah, likely to be the governor who in a short period of time in history has made the most aggressive rate cut, clarified that the current low OPR rate at 1.75 percent would help reduce debt servicing and financing costs. And she claims that it is low enough to promote more growth-supporting borrowings.

She added that “demand management tools such as monetary policy to be complemented by supply side and structural policies” are also critical for ensuring that the economy is experiencing a sustainable recovery.

In addition, Noor Shamsiah stressed that targeted measures would be more effective in tackling some of the pandemic-induced problems experienced by specific sectors and groups of the economy.

She clarified, for instance, that a blanket loan moratorium is not the solution to the current economic problems. “It is a mistake to think that only by implementing an automatic loan moratorium alone can the economy be helped”, she said.

The governor maintains the view that, compared to an annual contraction of 5.6 percent last year, the domestic economy will be on a recovery path to record growth in 2021.

Nevertheless, she affirms that economic health is still being assessed by the central bank to decide whether its initial growth forecast for 2021 needs to be revised from 6.5 percent to 7.5 percent, given a combination of many new developments, such as the implementation and extension of the Movement Control Order (MCO 2.0), the resurgence of Covid-19 cases, the promise of vaccines and more.

In 4Q20, the gross domestic product (GDP) of the country further shrank, recording a contraction of 3.4 percent compared to a decrease of 2.7 percent in 3Q20, as the recovery of the economy was affected by the tightening of restrictions on movement.

This takes the full-year GDP results to a 5.6 percent contraction in 2020, the highest fall since 7.4 percent in 1998. The contraction is more serious than the forecast of 3.5 percent to 5.5 percent for 2020 by the Finance Ministry. For contrast, in 2Q20, Malaysia’s GDP contracted 17.1 percent, while in 1Q20 it grew 0.7 percent. The GDP of Malaysia grew 4.3 percent in 2019 on a year-to-year basis.

 

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KUALA LUMPUR (Feb 11): Bank Negara Malaysia (BNM) is neither hawkish nor dovish, but it is defensive on the direction of the overnight policy rate (OPR).

Speaking at a virtual press conference in conjunction with the release of the economic data for the fourth quarter of 2020 (4Q20), BNM governor Datuk Nor Shamsiah Mohd Yunus stressed that the cumulative 125-basis-point slash on the OPR in 2020 will continue to stimulate the domestic economy.

The comment is understood as the central bank does not see any urgency to cut interest rates to drive growth while it will continue assessing the economic scenario locally and globally.

“Monetary policy will remain accommodative to support economic growth,” she told the media.

Nor Shamsiah, likely to be the governor who has done the most aggressive rate cut in a short span of time in history, explained that the current low OPR rate at 1.75% will help to lower debt servicing and the cost of financing. And she believes it is low enough to encourage more borrowings to support growth.

She noted that it is also important for “demand management tools such as monetary policy to be complemented by supply side and structural policies” to ensure the economy experiences sustainable recovery.

Furthermore, Noor Shamsiah emphasized that targeted measures will be more effective in addressing some of the pandemic induced problems experienced by specific economic sectors and groups.

For instance, she reiterated that a blanket loan moratorium is not the remedy to the current economic problems. It is a fallacy to think the economy can only be helped by the implementation of an automatic loan moratorium alone, she said.

“In the use of these policy tools, the bank will continue to implement policies judiciously and preserve policy space where possible. The bank’s policy also includes regulatory flexibilities, supervisory measures and establishment of financing facilities and other complementary financial sector policies.

“Above all, I must stress that with economic and financial conditions remaining highly uncertain and continuing to evolve, MPC (Monetary Policy Committee) will continue to assess the implications on the prospects of economic growth in the medium term,” said Nor Shamsiah.

The governor maintains the view that the domestic economy will be on a recovery path to register growth in 2021 compared with an annual contraction of 5.6% last year.

However, she acknowledges that the central bank is still assessing the economic health to decide if it needs to revise its initial growth forecast of 6.5% to 7.5% for 2021, given a combination of many new developments has arisen for instance the implementation and extension of the Movement Control Order (MCO 2.0), the resurgence of Covid-19 cases, the promise of vaccines and the brighter state of the world economy.

“So we are continuously assessing new data, and we will firm up in accordance with traditions this year’s growth forecast when we release our Economic and Monetary Review for 2020. I hope everyone can be a bit patient because we will be meeting again sometime next month,” she said.

The country’s gross domestic product (GDP) shrank further in 4Q20, registering a contraction of 3.4% compared to a decline of 2.7% in 3Q20, as the recovery of the economy was impacted by the tightening of movement restrictions.

This brings full-year GDP performance in 2020 to a contraction of 5.6%, the biggest decline since 7.4% in 1998. The contraction is more severe than the Finance Ministry’s projection of 3.5% to 5.5% for 2020.

For comparison, Malaysia’s GDP contracted 17.1% in 2Q20, while it grew 0.7% in 1Q20. On a year-to-year basis, Malaysia’s GDP grew 4.3% in 2019.

 

Labour market to remain weak

According to Nor Shamsiah, labour market conditions are expected to remain weak in the first half of 2021 before gradually improving in the second half of the year, supported by improvement in economic activities.

The governor noted that the position of the conditional movement control order (CMCO) from October 2020 had resulted in the unemployment rate edging upwards to 4.8% in December, as jobless claims also increased, particularly in tourism-related industries, in November before tapering slightly towards the end of the quarter.

Notably, job placement rates, which were steadily improving since June 2020, also declined since the CMCO in October.

 

Higher oil prices to fuel inflation

The country’s headline inflation is expected to average higher this year simply because of expected recovery of global oil prices. However, core inflation is expected to remain subdued amid continued spare capacity in the economy, said BNM.

“For 2021, headline inflation is projected to average higher, primarily due to higher global oil prices. Underlying inflation is expected to remain subdued amid continued spare capacity in the economy. The outlook, however, is subject to global oil and commodity price developments,” said the governor.

In 4Q20, headline inflation declined 1.5%, in part reflecting the larger decline in retail fuel prices, as compared to the corresponding period last year, the statistics show. Meanwhile, core inflation moderated to 0.8% due mainly to lower inflation for communication services and rental.

For 2020, the country experienced a deflation of 1.2%, in line with earlier assessments, due mainly to the substantially lower global oil prices.

 

Source: Edge Prop

 

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BNM – Overnight Policy Rate Remains At 1.75%

Bank Negara Malaysia’s (BNM) Monetary Policy Committee has kept the Overnight Policy Rate (OPR) unchanged at 1.75 percent, The Sun Daily said. This is because the latest indicators showed that economic activity in Malaysia was significantly improved during the third quarter, the committee said.

BNM warned that the recovery momentum could be affected in the fourth quarter by the rollout of targeted steps to curb the spread of COVID-19 in several states. To those who need a recap, the OPR is an overnight interest rate set by Bank Negara Malaysia ( BNM) that sets the interest rate for financial institutions that lend money overnight to each other. Banks appear to have changing amounts of cash reserves on a day-to-day basis, depending on the bank’s lending operations and the deposits and withdrawals of its customers.

The central bank nevertheless expects growth to fluctuate within its previous forecast range this year, with economic activities expected to continue to strengthen for the next year. The rate of recovery may however be inconsistent in different sectors. In fact, economic activity may stay below pre-Covid 19 levels in some sectors, while labour markets may strengthen slowly.

Given the considerably lower global oil prices, headline inflation is expected to be negative on average this year, and higher next year on average. In general, the MPC is convinced of a proper and accommodatory monetary policy stance, which adds that the cumulative reduction in the OPR’s 125 basis point this year will continue to stimulate the economy.

In the future, the Committee will continue to analyse changing circumstances and their effect on the overall outlook for domestic growth and inflation. BNM appears to strike a balance on many fronts as the central bank recognises the downside risks, OCBC Treasury Research said, while acknowledging that the outlook remains brighter than what might have been indicated in the headlines.

 

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This comes as Malaysia’s latest indicators showed significant improvement in economic activity during the third quarter, said the committee.

BNM cautioned that the momentum of recovery may be affected by the roll-out of targeted measures to curb the spread of COVID-19 in several states in the fourth quarter.

Nonetheless, the central bank expects this year’s growth to hover within its earlier forecast range, with the economic activity for next year forecasted to improve further.

“This will be underpinned by the recovery in global demand, the turnaround in public and private sector expenditure amid continued support from policy measures, and higher production from existing and new facilities,” said BNM as quoted by The Sun Daily.

However, the pace of recovery may be uneven across sectors. In fact, some industries may see economic activity remain below pre-Covid-19 levels, while the labour market may post slower improvement.

Headline inflation is forecasted to average negative this year, considering the substantially lower global oil prices, and average higher next year.

“The outlook, however, will continue to be significantly affected by global oil and commodity prices. Underlying inflation is expected to remain subdued in 2021 amid continued spare capacity in the economy,” it said.

Overall, the MPC believes the monetary policy stance is appropriate and accommodative, adding that this year’s cumulative 125 basis point reduction in the OPR will continue to provide stimulus to the economy.

Moving forward, the committee will continue to assess evolving conditions as well as their implications on the overall outlook for domestic growth and inflation.

OCBC Treasury Research said BNM appears to be striking a balance on multiple fronts as the central bank acknowledges the downside risks, while noting that the outlook remains brighter than what may have been suggested in the headlines.

“Putting all the different pieces of the puzzle together, the picture looks to us to be one of a central bank that would not hesitate to act by cutting its policy rate, if it deems that the downside risks it mentioned start to weigh on growth momentum more visibly,” it said as quoted by The Sun Daily.

 

Source: Property Guru

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Investors Are Still Investing In Us Despite Poor Performance In Q2 Of 2020

Malaysia remains confident about sustaining its investments, considering the low growth rate of the second quarter of 2020. The confidence in the business community and investor community has been enhanced by government progress in resolving the Covid-19 pandemic, Datuk Seri Mohamed Azmin Ali said.

He assumed that the Gross Domestic Product ( GDP) forecast growth of 6.3% to 7.5% by the International Monetary Fund ( IMF) and World Bank for next year also added to the investors’ positive sentiments about the country.

During the 2nd quarter of 2020, Malaysia posted its GDP contract of 17.1 percent – the worst quarterly double-digit decrease reported since 1998, as a result of the introduction by the Government of the Movement Control Order (MCO).

The Malaysian Investment Development Authority (MIDA) has brought 32 projects to Malaysia as of 31 May 2019, totalling RM 17.5 billion. Of these, 28 projects have been accepted, and four are still being evaluated.

Azmin Ali added that, while attracting more foreign investors, the Government remains committed to holding the country as a competitive investment destination.

 

For further reading, please refer to the article below:

Despite Malaysia’s low growth in the second quarter of 2020, local and international investors remain optimistic of keeping their investments in the country.

Senior Minister cum International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said the confidence of the business community and investors have been strengthened by the government’s success in tacking the Covid-19 pandemic, the decline in unemployment rate and the government’s commitment via the economic stimulus packages worth RM295 billion, reported Bernama.

He believes that the International Monetary Fund (IMF) and World Bank’s forecast of 6.3% to 7.5% growth in gross domestic product (GDP) for next year also contributed to the positive sentiment of investors towards the country.

“Although this is just a projection, it shows the level of confidence of foreign and local investors in Malaysia and the Perikatan Nasional (PN) government,” he told Bernama following the launch of the National Month Celebration 2020.

“In order to record a positive growth as projected by the IMF and World Bank, we need to accelerate the country’s economy from now onwards.”

He shared that the government remains committed to keeping the country as a competitive investment destination, while still attracting more foreign investors.

And given the strides made by the government, Azmin is confident that Malaysia’s economy will return on a better path next year.

In the Q2 2020, Malaysia saw its GDP contract 17.1% – the worst double-digit quarterly drop registered since 1998 due to the government’s implementation of the Movement Control Order (MCO) to curb the spread of Covid-19.

As of 31 May 2019, the Malaysian Investment Development Authority (MIDA) lured 32 projects to relocate to the country with investments totalling RM17.5 billion.

Of these, 28 projects have been approved, while four projects are still under evaluation.

Source: Property Guru

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Possibility of BNM cutting OPR to 1.50% in September –HLIB

According to Hong Leong Investment Bank Research (HLIB), there is a high possibility by the next Monetary Policy Committee (MPC) meeting this September, Bank Negara Malaysia ( BNM) will reduce overnight policy rate (OPR) by an additional 25 base points (bps) to 1.50 percent.

On July 8th 2020, the central bank announced that it had cut its OPR by 25bps to 1.75 percent to provide more policy support to speed up the economic rebound and that it will continue to analyse changing conditions and use its policy tools to build the conditions for sustainable economic recovery as needed.

“Therefore, as economic activity is expected to remain weak and inflation prospects modest, we assume BNM is able to reduce the OPR by another 25bps as soon as its September MPC meeting to 1.5%,” the research company concluded.

Since the floor was set 16 years ago, 1.75% OPR is the lowest. Yesterday, with a cumulative 125bps cut, BNM cut its fourth rate this annual.

HLIB said the reduction timing was sooner than planned when anticipated to cut 25bps in the second half of 2020 (2H20).

“The pace and strength of recovery remain subjected to adverse risk from domestic and external factors in spite of expectations of gradual improvement in Malaysia’s growth outlook,” he said.

In addition to the policy measures introduced domestically to mitigate the negative impact of Covid-19 lapse in October, HLIB indicated that economic downside risk could lead to more job losses and deterrence in slow and uncertain growth.

“As infection rates increased, countries that opened up their economies had to reimpose lockdowns in some sectors. This would lead to a decline in global demand and supply, reducing the pace of the global recovery, “said HLIB.

The MPC has predicted that inflation will be reduced by 2020, with the average inflation headline potentially negative for the year, with world oil prices projected to be slightly lower.

The MPC assesses the risk of a large and sustained price decline to be minimal, but ultimately inflation will depend on global oil and commodity prices.

 

For further reading, please refer to the article below:

KUALA LUMPUR (July 8): Hong Leong Investment Bank Research (HLIB) is not discounting the possibility that Bank Negara Malaysia (BNM) will cut the overnight policy rate (OPR) by another 25 basis points (bps) to 1.50% by as early as its next Monetary Policy Committee (MPC) meeting in September.

The central bank yesterday announced it had cut the OPR by 25bps to 1.75% to provide additional policy stimulus to accelerate the pace of economic recovery and will continue to assess evolving conditions and utilise its policy levers as appropriate to create enabling conditions for a sustainable economic recovery.

“Consequently, as economic activity is expected to remain weak and inflation prospects modest, we think it’s possible for BNM to reduce the OPR by another 25bps as early as its September MPC meeting to bring it to 1.50%.” the research house concluded.

The 1.75% OPR is the lowest since the floor was set 16 years ago. Yesterday, BNM made its fourth rate cut this year, with a cumulative 125bps slashed so far.

HLIB said while it had expected a 25bps cut in the second half of 2020 (2H20), the timing of the reduction was earlier than expected.

“Despite expectations of gradual improvement in Malaysia’s growth prospects, the pace and strength of the recovery remain subject to downside risks emanating from domestic and external factors,” it said.

HLIB added that policy measures implemented domestically to mitigate the negative impact of Covid-19 will lapse in October, putting downside risks on the economy, while sluggish and uncertain growth could lead to further job losses and deter investment.

“Globally, countries that opened their economies had to reimpose lockdowns in certain areas as the rate of infection rose. This will lead to downward pressure on global demand and supply conditions, limiting the strength of global recovery,” HLIB said.

The MPC expected inflation to be muted in 2020, with average headline inflation likely to be negative for the year as global oil prices are projected to be substantially lower.

The risk of a broad-based and persistent decline in prices is assessed by the MPC to be limited, but inflation will be ultimately dependent on global oil and commodity prices.

 

Source: The Edge Markets

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Full list of bank that won’t compound interest during BNM’s 6-month loan holiday

1. OCBC Bank (Malaysia) Bhd
OCBC said it will not be compounding interest and profit on mortgages and loans for SMEs during the period.

This means that these customers will not be charged any interest on the interest that arises from the moratorium period, it said in a statement.

“These are both trying and uncertain times. So we are seeking to alleviate our customers’ burdens as much as we can. Although compounding might be allowed for, we have elected not to do so in light of the pressing circumstances,” said OCBC Bank chief executive officer Datuk Ong Eng Bin.

2. Malayan Banking Bhd (Maybank)
Maybank also announced that it will not compounding interest for all individual, SMEs and non-retail and corporate customer loan facilities that qualify for the loan moratorium.

It noted that its fixed-rate hire purchase loans already do not have compounding interest, while eligible products under the moratorium include personal, mortgage, ASB, education and SME loans.

All Islamic financing facilities’ profit rates are already not compounded in line with Shariah principles.

“The bank hopes that with this additional measure, it will be able to provide them further relief from their financing obligations for this period and help them weather the other challenges they may be facing. The Covid-19 pandemic is an unfortunate situation and the bank is taking this opportunity to do the right thing in line with its mission of humanising financial services. Maybank is committed to relieving its customers’ distress during these trying times, and to allow them to focus on what matters most, which is their family and health,” it said.

3. CIMB Group Holdings Bhd
CIMB Bank and CIMB Islamic Bank are also waiving compounded interest and/or profit on its deferred loan and financing repayments.

For individual customers, eligible Islamic and conventional products under this moratorium include ASB Financing, home financing, auto financing and personal financing (Express Cash, Cash Plus Loan and Awam-i).

Whereas for SME customers, the moratorium applies to all existing term loans/financings and industrial hire purchase.

“CIMB welcomes the proactive measures announced by Bank Negara Malaysia to support Malaysians who are experiencing financial constraints during this challenging period. As a financial group that has always prioritised the well-being and advancement of people and communities, we hope this will help our customers who are faced with financial adversities and allow them to focus on other more critical areas of their livelihood,” said CIMB Group chairman Datuk Mohd Nasir Ahmad.

4. RHB Bank Bhd
RHB Bank Bhd will not be compounding interest for its retail and SME customers during the moratorium period.

The bank said that interest for all retail and SME banking facilities would not be compounded during the moratorium period, with instalment payment amounts remaining unchanged upon the conclusion of the six months.

RHB Banking Group managing director Datuk Khairussaleh Ramli said these additional measures introduced by BNM in partnership with the banking industry provides critical relief to ease the financial burden of individuals and businesses, particularly the SMEs, during this extremely challenging period.

5. Public Bank Bhd
Public Bank will not be compounding interest on monthly instalment payments for loans held by individual and business customers.

For Islamic financing, profit will continue to accrue on the outstanding principal amount; however, it will not be compounded, in accordance with Shariah principles.

“Following Bank Negara Malaysia’s announcement on March 25, 2020, Public Bank further extends the relief assistance to its customers by not charging any compounding interest on the interest that accrues during the moratorium period

“With the escalating Covid-19 outbreak, Public Bank is very concerned about its impact on the nation and hopes this extended financial assistance will provide additional relief to its customers,” said Public Bank managing director Tan Sri Tay Ah Lek in a statement.

6. AmBank and AmBank Islamic
AmBank and AmBank Islamic will not be compounding interest or profit on loans and financing during the six-month pause on loan repayments.

“We welcome BNM’s recent move to provide flexibilities for banking institutions like AmBank to respond speedily to customer needs in times like this. It is our responsibility as a trusted homegrown financial institution to come to the aid of our customers in their time of need. Forgoing compounding interest on top of the six-month payment deferment initiative and the credit card balance conversion programme is our way of giving back,” said AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir in a statement.

7. Affin Bank and Affin Islamic Bank
Affin Bank Bhd and its Islamic counterpart Affin Islamic Bank Bhd announced that they will not be compounding interest and profit for term loans and term financing during BNM’s moratorium.

In line with BNM’s guidelines, all retail and SME customers from both banks will be enrolled in the six-month deferment automatically.

For Islamic financing facilities under Affin Islamic Bank, profit rates are already not compounded, in line with Shariah principles.

“As the current situation is both challenging and filled with uncertainties, we hope the gesture announced today can make this difficult time easier for the customers and communities we serve. We are also committed to consistently identify more ways we can best help our customers”, said Affin Bank chief executive officer Kamarul Ariffin Mohd Jamil via a statement today.

8. Standard Chartered Bank Malaysia Bhd and Standard Chartered Saadiq Bhd
Standard Chartered Bank Malaysia Bhd will not be compounding the interest on its conventional loans while profit on Islamic financing by Standard Chartered Saadiq Bhd will not be compounded, in compliance with Shariah law, during the six months.

Products included in the automatic loan deferment programme are personal loans/personal financing-i, residential mortgage/Saadiq MyHome-i or Saadiq MyHomeOne-i and commercial mortgage loan/BizProperty Equity-i and business instalment loan/guaranteed instalment loans/biz-financing-i.

“The uncertainty caused by the pandemic has left many individuals and businesses in the lurch and this is our way of helping them cope and navigate through this tough period,” said managing director and chief executive officer Abrar A. Anwar.

9. HSBC
HSBC Malaysia announced non-compounded interest or profit during the moratorium period for retail and SME customers.

10. Alliance Bank
Interest on conventional loans will not be compounded during the moratorium period.

Profit for Islamic financing is not compounded but the interest/ profit on the deferred loan and financing repayments will continue to accrue during the 6-month period.

Other banks includes the following. However, please do contact your Bank for more details as each  bank T&C is different and subject to change without prior notice.

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Bank Negara grants six-month grace period for loans (updated)

KUALA LUMPUR: Banking customers, including individuals and small and medium sized enterprises (SMEs) will be allowed to delay the repayment of their existing loans, including mortgages and hire-purchases, for a period of six months.

This is part of the central bank’s new measures to assist borrowers experiencing temporary financial constraints due to the Covid-19 outbreak.

In a letter to the heads of financial institutions today, Bank Negara said the automatic moratorium will be effective from April 1.

“Banking institutions should provide individuals and SME borrowers with adequate information on how the suspended loan/financing repayments/payments will be treated during the moratorium period,” the central bank said.

The automatic moratorium is applicable to ringgit-denominated loans or financing that are not in arrears exceeding 90 days as at April 1, 2020.

The moratorium does not apply to credit card balances.

For outstanding credit card balances, Bank Negara said customers should be offered the option to convert the outstanding balances into term-loan of not more than three years.

“For corporate borrowers, banking institutions are strongly encouraged to facilitate requests for a moratorium,” the letter stated.

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NPL growth may overtake loan growth

PETALING JAYA: Non-performing loan (NPL) growth for banks in Malaysia could be higher than their loan growth this year as the industry deals with the economic fallout from the coronavirus (Covid-19) outbreak.

S&P Global Ratings projects the NPL ratio could peak to between 1.7% and 1.8% of outstanding loans this year compared with 1.5% as of Dec 31,2019.

The ratings house also revised down its credit growth forecast for Malaysian banks, from the previous 3%-5% to 1%-3% in 2020.

S&P Global Ratings credit analyst Nancy Duan said: “The global outbreak of Covid-19 and renewed domestic political uncertainty add obstacles for Malaysian banks, which are already grappling with the effects of a slowing economy and dampened investor and consumer sentiments over the past year.”

In particular, the global health emergency and domestic political upheaval are affecting oil prices, consumer confidence and the broader economy in Malaysia.

S&P Global Ratings’ forecasts are based on the assumption that the Covid-19 outbreak will subside and the domestic political stability can be restored over the coming months.

Should these risks prolong beyond the second quarter of 2020, the forecast figures would need to be revisited.

A banking analyst disagrees with the assumptions of the foreign credit agency and expects loan growth in 2020 to be about 4%, in line with gross domestic product (GDP) growth.

“Looking at the 1.6% NPL ratio recorded in January 2020, there could be a slight uptick going forward.

“This will depend on the depth of external factors apart from Covid-19, such as the US-China trade tensions, which is still ongoing, ” he said.

When asked if the overnight policy rate (OPR) cuts can help boost loan demand, the analyst opined that this would be dependent on market sentiments, as further rate cuts may not translate to improved consumer purchasing power.

Kenanga Research, in a sector report, said accommodative interest rates will continue to support a resilient household loan segment, alleviating the moderation in business loans.

Given the banks’ modest target for 2020 after the recent results season, the research house forecasts loan growth at 4% to 4.5% for the year, driven by resilient household and business loans, with a fiscal push expected in the second half of the year.

“The soft interest rate regime is expected to support loan growth coupled with ease of application.

“While the uptick in impaired loans is a concern, it is still below its five-year peak of 1.67% in February 2015, ” said Kenanga Research.

Meanwhile, S&P Global Ratings also expects more potential easing from Bank Negara to support the economy, leading to a further five to 10 basis point compression of banks’ net interest margin in 2020.

“Our base case assumes stable capital adequacy ratios.

“However, risks are now tilted to the downside, given added drains on profitability and the rising dividend payouts announced by some banks last week, ” it said.

On the government’s RM20bil stimulus package, S&P Global Ratings expects it to have a neutral impact on local banks.

“Supportive policies in the package could strengthen lifelines to banks’ affected clients.

“However, we feel the special credit facility of RM2bil is more symbolic than material, and that credit demand will weaken visibly, especially over the first half of 2020.

“Transitory asset-quality problems could become permanent if the severity and duration of the disruptions were prolonged.

“This in turn would eventually push up banks’ credit costs – meaning the allocation of provisions for impaired and potentially impaired loans, ” the credit risk research house noted, projecting sector-wide credit costs to be 20 to 25 basis points of total loans in 2020.

It is interesting to note that Malaysian banks’ direct exposure to the most disrupted sectors by Covid-19, such as hotels, restaurants and airlines, is small, at only a single-digit percentage of loan books on average.

Duan added that Malaysian banks are fundamentally strong, backed by low NPL ratios, light credit costs, and large capital buffers.

“The banks’ credit profiles have remained solid despite muted profitability in recent years. Conditions in 2020 will put the banks to a much bigger test to their resilience, ” she said.

Source: TheStar

 

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