KUALA LUMPUR (Aug 28): Malaysia’s gross credit grew a tad faster in July as lending to business picked up while household loans expanded steadily, data out on Friday showed.

Credit to the private non-financial sector grew by 6.5% in July, slightly higher than June’s rate of 6.4%, Bank Negara Malaysia said in a statement. Outstanding loans increased 6% while corporate bonds rose 8% in July.

Business loan growth was 7.5%, outpacing June’s 7.2% increase, driven primarily by working capital loans. Household loan growth, meanwhile, remained unchanged at 5.3%.

“Banks continued to maintain healthy liquidity buffers” and “asset quality remained intact”, the central bank said.

The aggregate liquidity coverage ratio stood at 148.7%, well above the regulatory minimum and supporting banks’ resilience against potential liquidity shocks, the central bank noted.

Gross impaired loans — bad debts as a share of total loans — remained stable at 1.4% in June. After factoring in recoveries, the net impaired loan ratio was 1%.

Loan loss coverage, including regulatory reserves, was more than sufficient to cover up to 125% of loans turning sour.