fbpx
Previous
Next

Advertisement Banner

NPL Malaysia on the way up. How up?

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
crop businessman giving contract to woman to sign

Let’s look at NPL Malaysia today.

Referring to investopedia.com, “A nonperforming loan (NPL) is a loan in which the borrower is default and hasn’t made any scheduled payments of principal or interest for some time.” Click here to look at a full explanation yeah. Briefly, it meant that the lender (usually the bank) would have to expect that the loan may not be paid and they may have to make provision for it once this (NPL) happens. They could also restructure the loan repayments too.

During the COVID-19 pandemic, a moratorium was given instead of having a lot of loans suddenly turning into NPL. As a licensed auctioneer, I can safely tell you that if the banks forced the borrower into default during this COVID-19 pandemic period, that property they take back may be auctioned off at a price which is even lower than what the borrower owe. Thus the moratorium is considered a win-win situation to all. This includes the owners of similar properties, else, the auction price may also affect their property value too.

In Malaysia, Non Performing Loans are defined as loans overdue for more than 90 days. Let’s look at Malaysia’s NPL from 2010 all the way to Dec 2019. If you like to see even more, you can also refer to ceicdata.com here.

Is Malaysia’s NPL on the way up. The answer is a firm yes.

Is this the highest we have ever seen. The answer is a firm no.

In 2008, there was a Mortgage Crisis which was triggered by that biggest economy of the world. We could see that it has also definitely caused some worry in the market. This situation has continued to become better from 2011 to 2012 to 2013 and have reached a low point in 2016 and then it has started to have an uptrend again, most probably is also because at the height of the property boom, many bought properties they struggle to afford in 2012 and when it’s completed in 2016, some of it turned into non performing loans for the banks.

NPL Malaysia
Source: ceicdata.com

Conclusion

It’s always good to see the numbers in a wider context versus a very narrow view. Would another financial crisis be on the way? I have no idea but seriously, do not ask any economist as well because the only way they could know is by looking at history yeah. More importantly, did we manage our borrowings based on what we could afford. If we did, then chances are we are able to hold on for a while even if unforeseen circumstances do happen. Let’s manage this well yeah. Continue reading kopiandproperty.com too.

Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles. Else, follow me on Twitter here

Love to be updated on all investment news? Sign up for KopiWeekly. (only once per week of property, finance, investment news and more)

Next suggested article:   Discovering why your age could be an advantage for property investment

1 thought on “NPL Malaysia on the way up. How up?”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

We love to hear from you (Facebook Comment)

LIKE us for property news update, FREE.

Previous
Next

Advertisement Banner

kopiandproperty.com

kopiandproperty.com

kopiandproperty.com is everything about property related writings and news. Enjoy reading with a latte.
Previous
Next

Advertisement Banner

LIKE us for property news update, FREE.

Property investment news everyday? Subscribe for free!

An article a day, keeps updated all the way.

Join 1,491 other subscribers

Property investment news everyday?

An article a day, keeps updated all the way. Subscribe for free!

join the family

Like us for daily investment news and more

Hit the like

%d bloggers like this: