Malaysia’s business loans slated for up to 7% growth in 2024

However, softer credit demand is seen from the household segment.

Malaysian banks’ loans are expected to surpass 6% year-on-year (YoY) growth for the full year of 2024, lifted by business loans.

Business loans expanded at a faster pace in June, at 6.4% YoY, reports UOB Kay Hian, based on data from the Bank Negara Malaysia (BNM).

Business loans may grow by up to 7% YoY in 2024, versus earlier estimates of a 6% YoY growth, said UOBKH analyst Keith Wee Teck Keong.

Working capital loans expanded 6.8% YoY in June, extending the 4% growth recorded in May. This was underpinned by the growth of loans to the services, wholesale and retail, and construction sectors.

One downside is that the number of loan applications are declining. Loan application growth grew 1.5% YoY in June, slower than the 3.4% YoY growth reported in May. Loan approvals also slowed to a 7.6% YoY growth versus the 15.5% YoY growth in May.

In particular, the household segment experienced a decline in loan application and loan approval growth, reflecting softer credit demand, said Wee.