KUALA LUMPUR: RHB Research maintained its 2023 system loan growth forecast at 4.0–4.5 per cent year-on-year (YoY) for the banking sector.
It noted that for September, system loans grew 4.3 per cent YoY, with household loans up by 5.6 per cent YoY and non-household loans up by 2.6 per cent.
"This was supported by steady growth across most loan purposes, with the exception of construction and the purchase of securities.
"The sectors that recorded stronger loan growth include transport and communications (7.5 per cent) and finance (6.3 per cent).
"Year-to-date, system loans have increased by 3.0 per cent. We maintain our 2023 system loan growth forecast at 4–4.5 per cent YoY," it said in a note.
It added that the banking system's capital buffers remain sufficient, with common equity tier 1 capital remaining at 14.5 per cent, system loan-to-deposit ratio at 85.7 per cent, and liquidity coverage ratio at 150 per cent.
"For the small and medium enterprises (SME) segment, loans grew 6.1 per cent YoY in August but were flat month-on-month.
"Loans for wholesale and retail and transport and communication segments led the overall loan growth."
RHB said that the SME gross impaired loans ratio continued to increase, up to 3.17 per cent from 3.09 per cent in July.
The research firm maintained its "neutral" weighting on the sector amid a backdrop of normalising earnings growth heading into 2024.