KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Malaysia's banking sector defied global headwinds in 2024, posting a 17% surge in performance—anchored by Bursa Finance Services and positioning the nation as Southeast Asia’s premier financial hub. As industry giants like Maybank and CIMB gear up to announce their final-quarter results, investors are keen to see if this bullish momentum can carry into 2025.
Sector Highlights and Growth Drivers
- Resilient Performance: Despite global uncertainties, the banking sector delivered a 17% rally, underlining its robust fundamentals.
- Credit Expansion:
- Consumer Lending: Total loans increased by 5.5% YoY, with housing loans up 6.9% and auto financing surging 8.4%—the latter reaching a three-year high amid low interest rates and promotional campaigns.
- Corporate Financing: Enhanced demand for short-term working capital, especially in manufacturing and services, spurred a healthy rebound in corporate loans.
- Asset Quality Improvement: The gross impaired loan (GIL) ratio dropped by 14 basis points, reverting to pre-pandemic levels—marking the strongest asset quality in five years. This progress is supported by a solid 4.2% GDP growth in 2024.
Catalysts for 2025
- Policy and Infrastructure Boost:
- Johor-Singapore SEZ: The recently inked SEZ agreement is expected to lift corporate loan demand by 2–3 percentage points, particularly in cross-border trade finance and logistics.
- Data Center Boom: With project financing for data centers projected to exceed RM20 billion, long-term loan growth is set to accelerate.
- Stable Monetary Policy: The Central Bank of Malaysia is anticipated to keep the overnight policy rate at 3.0% through mid-2025, alleviating net interest margin (NIM) pressures.
- Diversification and Digital Transformation:
- Leading banks are shifting focus, with non-interest income now accounting for over 50% of total revenue(Maybank at 53%).
- Digital initiatives are reaping rewards, exemplified by Maybank’s MAE platform, which now boasts over 12 million users, driving down the cost-to-income ratio.
Conclusion
Malaysia’s banking sector is entering 2025 on a strong footing—bolstered by resilient credit demand, improved asset quality, and strategic investments in both infrastructure and digital transformation. Investors are advised to monitor the upcoming earnings season for further insights into SEZ-related opportunities and the burgeoning data center market, which could signal sustained growth.
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