Industry loan growth has picked up for the first time in six months, in September, after the phased re-opening of the economy and is expected to gain further momentum.
“We remain focused on supporting customers in their personal and business endeavours, and will continue to do so, in line with the recovery of the economy in FY 2022,’’ said Hong Leong Bank Bhd group managing director and CEO Domenic Fuda. Hong Leong Bank believes that its 5.0% to 6.0% loan and financing growth target for this financial year is achievable, backed by a healthy loan and financing pipeline for mortgage and auto loans, the pick-up in retail spend and continued support to small and medium scale enterprises as well as businesses in the recovery phase,
“With the economy in the recovery phase and stabilising, coupled with high vaccination rates, there should be good opportunities for retail and especially business customers to invest in their businesses to take advantage of the low cost of borrowing, as financing is more affordable,’’ said Fuda. For every 25 bps in interest rate hike, banks’ net profit is expected to increase by 2.4%, said CGS-CIMB Securities equities research analyst Winson Ng.
Lending to the non-household segment, which saw a healthy start in the Q1’21, had slowed down in Q2’21 as the new wave of Covid-19 infections led to uncertainty among businesses.