KUALA LUMPUR – Banks have seen some stress amid squeezed margins and lower lending targets due to Covid-19 pandemic-related challenges, but targeted repayment assistance (TRA) has made it manageable, as the industry can gauge risk factors and react accordingly.
Among others, CIMB Bank Bhd said that, along with other Malaysian banks, it has moderated loan growth projection, given the impact of the pandemic.
“At the start of the year, CIMB Malaysia’s loan growth was expected to grow by 6% to 7%. At the current juncture, CIMB Malaysia’s 2020 loan growth is expected to end at about 4% to 5%,” a CIMB Bank spokesman said.
However, the situation is manageable as the government’s move on TRA at the end of its six-month blanket moratorium has enabled banks to gauge the situation and act accordingly.
On what would happen if there was another blanket three- or six-month moratorium, the spokesman said it would impact the bank’s profitability and liquidity, and subsequently, the wider economy.
“A further blanket moratorium would allow everyone, even those with high disposable income or not affected by the pandemic, to benefit from payment relief, which is not productive in the current environment.”
It is optimal that assistance to borrowers is done in a targeted manner to ensure funds and resources are specifically channelled to individuals and businesses in need of help.
“All banks remain committed to extending assistance to those who are affected and have agreed to give approval for repayment relief to those who have lost their jobs or whose income has been reduced due to the pandemic. This has been extended to all B40 borrowers and micro enterprises where approvals are given automatically, upon responding to the banks.”
Furthermore, depositors and shareholders of banks that predominantly are institutional investors managing funds on behalf of contributors or the public, such as Permodalan Nasional Bhd, the Employees Provident Fund and Retirement Fund (Inc), need to be assured that banks can remain profitable to provide dividends and returns for the benefit of the rakyat.
It is also critical to ensure the banking system remains healthy and has the liquidity from repayments from its borrowers for banks to finance new productive lending to help fuel economic recovery.
RHB Banking Group managing director Datuk Khairussaleh Ramli said that from an asset quality perspective as a whole, banks are seeing some signs of stress, but this has so far been manageable.
As of end-November, RHB approved payment assistance for loan and financing facilities totalling RM11.8 billion to the retail segment.
“This includes providing payment assistance to more than 71,000 of our B40 and M40 customers, amounting to more than RM4.5 billion and to more than 1,300 small and medium enterprises (SMEs), including micro enterprises totalling RM3.7 billion.”
Overall, RHB has already provided financial assistance to about 123,000 individuals, SMEs and corporate customers, with loan and financing facilities totalling RM19.85 billion, he said.
He said the RHB TRA programme has also been enhanced to make it easier for individuals and SME customers to obtain financial assistance.
“Our application process has been simplified further, wherein no supporting documentation is required for individual customers to be eligible for the TRA. For customers registered under the Bantuan Sara Hidup or Bantuan Prihatin Rakyat programmes, approvals will automatically be given.
“We strongly urge our customers to contact us as soon as possible if they are in need of payment assistance as the TRA programme will continue to be available until the end of June 2021."
For more about the enhanced TRA, visit RHB's website. Alternatively, customers can also inquire further at any RHB branch. – Bernama, December 15, 2020
