KUALA LUMPUR (Nov 22): MALAYAN BANKING BHD [] (Maybank) has lauded Bank Negara's (BNM) new loan guidelines to protect loan applicants, describing them as a timely and pre-emptive move to prevent household debts in the country from going out of hand.
Maybank president and chief executive officer Datuk Seri Wahid Omar said the current ratio of household debt to GDP at 77 per cent is still not too high but it is better for the central bank to jump in early before the situation gets worse.
"It is best for BNM to come in early and make sure that all the financial institutions, non-bank financial institutions as well as cooperatives play their part so that we all lend our money responsibly," he told reporters after a zakat handing over ceremony here.
Starting Jan 1 next year, BNM will be enforcing new guidelines for home and vehicle financing, credit and charge cards, personal financing including overdraft facilities as well as financing for the purchase of securities, except for share margin financing, which comes under stock exchange rules.
The guidelines will include a more stringent "suitability and affordability assessment" which would ensure borrowers have the ability to pay without recourse to debt relief or substantial hardship.
Wahid said though the move would see lower loan disbursements, it would at the same time increase the quality of debt repayments which in turn would increase the bank's net income.
"We are looking at overall repayment capacity. Viewed from the gross perspective, the percentage would be lower but looking at the net income, the proportion of debt servicing would be higher," he said.
On next year's forecast, he said the banking industry's growth is expected at 1.5-2 times the country's gross domestic product (GDP) growth.
"With the problems in Europe and the US economy, we are expecting a slower global economic growth.
"Malaysia will be affected and we are looking at 3.8 to four per cent GDP growth," he said.
He said the industry's loan growth forecast of around eight per cent is achievable, fuelled by loan demand from the Economic Transformation Programme projects. - Bernama
Maybank president and chief executive officer Datuk Seri Wahid Omar said the current ratio of household debt to GDP at 77 per cent is still not too high but it is better for the central bank to jump in early before the situation gets worse.
"It is best for BNM to come in early and make sure that all the financial institutions, non-bank financial institutions as well as cooperatives play their part so that we all lend our money responsibly," he told reporters after a zakat handing over ceremony here.
Starting Jan 1 next year, BNM will be enforcing new guidelines for home and vehicle financing, credit and charge cards, personal financing including overdraft facilities as well as financing for the purchase of securities, except for share margin financing, which comes under stock exchange rules.
The guidelines will include a more stringent "suitability and affordability assessment" which would ensure borrowers have the ability to pay without recourse to debt relief or substantial hardship.
Wahid said though the move would see lower loan disbursements, it would at the same time increase the quality of debt repayments which in turn would increase the bank's net income.
"We are looking at overall repayment capacity. Viewed from the gross perspective, the percentage would be lower but looking at the net income, the proportion of debt servicing would be higher," he said.
On next year's forecast, he said the banking industry's growth is expected at 1.5-2 times the country's gross domestic product (GDP) growth.
"With the problems in Europe and the US economy, we are expecting a slower global economic growth.
"Malaysia will be affected and we are looking at 3.8 to four per cent GDP growth," he said.
He said the industry's loan growth forecast of around eight per cent is achievable, fuelled by loan demand from the Economic Transformation Programme projects. - Bernama
