Banks see higher fixed deposit uptake following MPC meeting
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Loading... - Bojing Liu
- 02 May 2023
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The surge was likely due to BNM’s decision to maintain the OPR, says MIDF Research.
Fixed deposits saw a surge in uptake in March, increasing 8.9% year-on-year and 1.9% from the previous month.
In a banking statistics report today, MIDF Research highlighted that the surge was likely due to the high number of applications submitted following Bank Negara Malaysia monetary policy committee’s (MPC) decision to maintain the overnight policy rate (OPR).
“Regardless of the outcome (of the MPC meeting), (we believe) customers were eager to lock in deposits anyway,” it said.
As a result of the uptick in fixed deposits, banks’ current account and savings account (CASA) ratios dropped to 30.6%, marking a low since 2020.
“Despite erratic interbank spreads, banks maintain that there are no liquidity issues with LCR (liquidity coverage ratio) also remain(ing) at a high level,” said MIDF.
Loan growth has also stabilised, growing around 5% year-on-year, while month-on-month (m-o-m) growth is small but shows no decline.
CGS-CIMB Securities Research said separately in a note today that the easing on loan growth from 5.3% y-o-y at end-February was in line with the expected average loan growth of 4-5% for 2023.
CGS-CIMB analyst Winston Ng noted that banks’ gross impaired loan (GIL) contracted by RM162.5 million or 0.5% m-o-m in March 23, better than house expectations for a continuous uptrend in GIL.
Despite improvements in these indicators, MIDF expects net interest margin (NIM) pressure to lead to a lacklustre Q1 2023 earnings season due to deposit competition. Read More…
