Asia: Stronger demand for corporate loans in Malaysia

Malaysia’s top two banks, Maybank and CIMB, are expecting stronger demand for corporate loans in the Southeast Asian region. This growth will be driven by improving economies and will support their overall loans growth in 2018.

CIMB set a target to improve loan growth this year as it expects performance in its Indonesia, Singapore, and Thailand units to recover. Its loan growth weakened to 0.2% last year, against a target of 7%. Meanwhile, Maybank reported a 4% group loan growth in 2017, a rate it plans to maintain this year.

CIMB saw higher provisions in the Singapore and Thailand markets for commodity-related loans last year, while Maybank said provisions for oil and gas loans had reduced, as both banks recorded comparable net interest margins (NIMs) - the difference in interest paid and earned and a measure of bank profitability - with Maybank at 2.36% and CIMB at 2.63%.

According to RFi Group data, Maybank and CIMB are the two leading banks when it comes to market share for credit & lending services in Malaysia, which include corporate loans. With an expected increase in demand for corporate loans in the Southeast Asian region, it would likely enhance both Maybank as well as CIMB’s market share in the credit & lending services space.

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