support@kopiandproperty.com

Previous
Next

Advertisement Banner

Banks are really still lending. Need some proofs?

Yes, there are differences between banks rejecting loan applications because they do not quality versus refusing to lend because they feel their own non-performing-loans (NPLs) are becoming too high. The former remains true. The latter is definitely untrue because our NPL is still very low even by international standards. Image below for reference from ceicdata.com .

Article in edgeprop.my Bank Negara Malaysia (BNM) revealed that within the Jan – Sept (2019) period, banks approved housing loans worth RM119 billion for about 273,000 borrowers or which 42% were first time homeowners. Statistically, banks have been approving roughly three out of four housing loan applications which they received from households and businesses.

One major reason for rejections are due to the broader issue of home affordability, which becomes readily apparent when 72% of rejected applications were for the purchase of homes that are either seriously or severely unaffordable relative to the applicant’s income level. From the small and medium enterprise (SME) segment, banks have been approving about seven to eight out of every ten loan applications received. This has benefited 76,000 SMEs.

BNM also said that banks have a natural incentive to lend because in the case of Malaysian banks, net interest income comprises 64.8% of their gross income. This incentive continues to grow because the banks’ profit margins have come under greater pressure from other banks for market share. Thus, the ability of banks to grow their lending will be important for them to maintain their profitability. Do read the full Article in edgeprop.my

Hopefully more people understand that if banks stop lending, they will start ‘firing’ people. Profits are needed to continue hiring more people while losses or even lower profits may just meant that they have excess staffs. Just google for “bank retrenchments” and we will be able to read about all the negative news worldwide. In actual fact, this will continue because online will become every more powerful and people continue to change their banking habits. I was in a bank recently to close an account and there were NO OTHER customers in the bank except me! Happy understanding.

Please LIKE kopiandproperty.com FB page or Sign Up for free to get daily updates about the property market. Else, follow me on Twitter here.

Next suggested article: Banks please don’t lend if prices too high. Buyers, please do not overstretch.

Property Investment always start with knowledge. Equip ourselves with more here.

Motion arrow towards right
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Motion arrow towards right
Share on facebook
Share on twitter
Share on linkedin
Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

Previous
Next

Advertisement Banner

Facebook Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Table of Contents

Most Recent Posts

join the family

Like us for daily investment news and more

Hit the like