Home loan applications decline in August
The volume of loan applications for residential properties declined by three percent year-on-year in August, leading to a decline by 12.7 percent in loan approvals, according to OSK Research.
A decline of 4.8 percent was also seen for non-residential properties, resulting in approvals of which falling by 1.9 percent.
Going forward, OSK Research believes that the five percent increase in Real Property Gains Tax (RPGT) will likely affect the numbers of property loans to be granted. Nonetheless, the revision on the tax may deter speculation.
Aside from that, Malaysia's banking sector remains well capitalised with core capital ratio (CCR) at 12.7 percent and risk-weighted capital ratio (RWCR) at 14.6 percent.
However, the deposit growth of 12.2 percent was lower than the loans growth of 12.3 percent for the first time this year.
Furthermore, OSK Research favours banks with solid exposure to Economic Transformation Programme (ETP)-related corporate loans, sukuk origination, and distribution strength.
However, the research unit is cautious on banks with heavy exposure to property, because the already-slowing real estate market may be further affected by the RPGT increase.
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