KUALA LUMPUR (Sept 30): Malaysia’s gross loan growth picked up in August, supported by stronger business loans and corporate bond issuance, latest data out on Tuesday showed.

Credit to the private non-financial sector grew 5.6% year-on-year in August, compared with 5.5% in July, Bank Negara Malaysia (BNM) said in a statement. Outstanding corporate bonds rose 5.6% versus July’s 4.8%, while outstanding loan growth was steady at 5.6%.

Business loan growth accelerated to 5.2% from 4.9% in July, lifted by higher working capital financing among large companies, while investment-related loans remained stable. Household loan growth held at 5.9% with sustained demand across most purposes.

BNM said banks’ asset quality stayed “sound and stable” with the gross impaired loans ratio — the proportion of bad debts as a percentage of total loans — unchanged at 1.4%. After factoring in recoveries, the net impaired loans ratio was 0.9%.

The loan loss coverage ratio, including regulatory reserves, climbed to 146.8% from 128.9% in July.

Liquidity conditions also remained healthy, with the aggregate liquidity coverage ratio at 146.8% in August compared to 158.4% in July, while the loan-to-fund ratio was broadly stable at 83% versus 82.8% previously.