KUALA LUMPUR (May 29): Gross loan growth in Malaysia held steady, and banks’ asset quality remained intact in April, according to Bank Negara Malaysia (BNM).

Credit to the private non-financial sector rose 5.8% in April, up from 5.6% in March, as business loan growth accelerated to 6.3% from 5.7% previously, coupled with a pick-up in growth of outstanding corporate bonds to 6.1% from 5.8%, the central bank said.

"Business loan growth increased following higher loan growth among non-SMEs, particularly for working capital purposes. Meanwhile, growth for investment-related loans remained forthcoming across both SMEs and non-SMEs," it noted in a statement.   

Household loan growth edged up to 5.5% in April from 5.4% a month earlier.

On asset quality, gross and net impaired loan ratios were stable at 1.4% and 0.9% respectively.

The loan loss coverage ratio, including regulatory reserves, remained prudent at 125.4% of gross impaired loans, from 124.8% in March, BNM said. 

The banking system also maintained healthy liquidity buffers, with the aggregate liquidity coverage ratio rising to 152.8% from 144.6%.