The Central Bank is optimistic about Malaysia's economic growth prospects, stating that the local financial system is sufficient to support the expected GDP growth of 4.5% to 5.5% this year, and most investment banks share the sentiment, being bullish on the stable growth prospects of local bank stocks.
The Central Bank released the Financial Stability Assessment Report for the second half of 2024 yesterday and held a briefing session with analysts. Among them, analysts from Dat Securities pointed out that considering the performance of the banking industry is closely related to the overall domestic economic performance, the expectation of strong and stable economic growth in the country will support the expected loan growth of 6.2% for the domestic banking industry in 2025.
"Our forecasts are in line with the Central Bank's expectations, with consumer loans continuing to be the key driving force for the growth of the domestic banking industry, supported by a robust job market and rising incomes. "
The analyst expects that consumer loans will expand by 6.7% this year, while commercial loans will increase by 5.5%, leading to an overall growth of 6.2% in the banking sector.
The analyst also indicated that loans to businesses and small and medium-sized enterprises (SMEs) are expected to accelerate, driven by the current investment activity upcycle, the high implementation rate of approved investment projects, and the execution of various national development blueprints.
The central bank pointed out yesterday that Malaysia's GDP is expected to grow by 4.5% to 5.5% this year, driven by strong household consumption and robust investment activity.
Despite the issues of US tariffs and increased geopolitical risks causing recent market turbulence, leading to capital outflow from Malaysian stocks...