Author Topic: STD&POOR  (Read 135 times)

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STD&POOR
« on: June 29, 2017, 09:53:31 AM »



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Non-performing loans to rise — S&P
Samantha Ho
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The Edge Financial Daily

June 29, 2017 08:44 am MYT
This article first appeared in The Edge Financial Daily, on June 29, 2017.


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KUALA LUMPUR: Malaysian banks may see an uptick in non-performing loan (NPL) ratio as Bank Negara Malaysia (BNM) is expected to raise its overnight policy rate (OPR) twice by end-2018.

Furthermore, the likelihood of a higher unemployment rate may result in more loan defaults, according to S&P Global Ratings.

The rating agency anticipates a 25-basis point (bps) hike in OPR by end-December and another 25bps next year, bringing the rate to 3.5% — a move to catch up with interest-rate normalisation in the US.

The rate hikes are expected to lead to a higher NPL ratio among local banks to between 1.8% and 2%, up from a near-historical low of 1.6%, said S&P financial institutions ratings director Ivan Tan in a conference call yesterday.

Among local banks, Malayan Banking Bhd, CIMB Bank Bhd and RHB Bank Bhd have been among those which have seen increases in NPL ratio since 2015 (see chart).

In terms of asset quality, Malaysia has been better than its regional peers in Asean except for Singapore (see chart), Tan noted. Nonetheless, he warned that oversupply in the commercial property market and a weak oil and gas (O&G) sector will remain as downside risks to the asset quality of Malaysian banks.

Tan also cautioned that the low-interest rate environment has helped lift the indebtedness of corporations and households, which is among the highest in the region.

The household debt-to-gross domestic product (GDP) ratio was 88.4%, while corporate debt was about 110% of GDP in Malaysia. Any increase in the jobless rate could lead to a rise in household NPL, said Tan, citing the example of bank mergers which would result in retrenchments due to overlaps in certain segments.

“There’s this vulnerable household sector that is currently earning RM3,000 a month or less — those will be very sensitive to increases in interest rates,” he noted, adding that the group makes up some 12% of banking system loans currently.

“The good news is that there has been a very small decline in the household debt-to-GDP [ratio] in the last one year. Where I’m getting my comfort from is not the fact that it has come down, but the fact that there has been a change in trend, which is positive for the household sector as a whole,” Tan explained.

The household debt-to-GDP ratio contracted last year, the first time since 2010.

Meanwhile, S&P’s financial ratings associate Nancy Duan observed that Malaysian banks are becoming more cautious about lending to the commercial property market. “We have seen the loan approval rate for the segment drop by almost half,” Duan said during the conference call.

“We don’t think the stress has been translated into the overall NPL yet,” she added.

The slowdown in the O&G sector, she noted, may continue to see companies reducing corporate borrowings, while the pool of corporate deposits has fallen. “As a result, impaired loans and credit costs are expected to rise further,” Duan said.

For Malaysian banks, loan growth in 2017 is expected to be 5% to 6%, driven by demand for affordable housing, small and medium enterprises, and corporate loans for infrastructure projects, Duan said.

However, banks will suffer from higher credit costs that are expected to further stress the banks’ profit margin, she added.

“Malaysian banks in general [have focused on] protecting their bottom line, but we do have our doubts about how sustainable this approach can be in the future. The banks need to grow, and they have constant requirements to invest in compliance and technology.

“For example, the recent [RHB-AMMB Holdings Bhd] merger will lead to a spike in compensation costs. This all will [add] downside risks to earnings forecasts. We are not very optimistic about the [banks’] earnings performance,” Duan commented.

In an earlier report, the global rating agency said it expected full-year profitability for local banks to remain sluggish on a weak energy sector, subdued global demand and tightened domestic spending.

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STD&POOR
« on: June 29, 2017, 09:53:31 AM »

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Re: STD&POOR
« Reply #1 on: July 06, 2017, 01:38:02 PM »





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Standard & Poor’s trying to mislead Malaysians?
July 6, 2017
S&P speaks in terms that the consolidation of the banking industry, with the consequence of creating larger banks, is good for the economy. How can this be the case?
COMMENT
j-solomon_MTUC_pekerja_600

By J. Solomon
A media report on 29 June 2017 citing Standard & Poor’s Global Ratings (S&P) is both concerning and expected. S&P, in representing the corporate world and the failed neo-liberal agenda, has questioned the political will to push through with the proposed RHB-AMMB merger.
The National Union of Bank Employees (NUBE) and the Malaysian Trades Union Congress (MTUC) roundly condemns the efforts of mergers and take-overs that result in not just social issues such as loss of jobs but also economic ones in the longer term.
S&P speaks in terms that the consolidation of the banking industry, with the consequence of creating larger banks, is good for the economy. How can this be the case and why is an organisation such as S&P trying to mislead Malaysians? What is the agenda of S&P?
The Global Financial Crisis of 2008 had taught us a few things, chief among them being that the size of banks and the brazen speculative behavior of such banks was the main cause of the financial crisis. It was the taxpayer that had to eventually bail out big banks, and the economy as a whole.
How is creating such risks for the Malaysian economy, in terms of a RHB-AMMB merger going to benefit Malaysians and the Malaysian economy? It will have an immediate benefit on the share prices and executive compensation.
Organisations involved in the exercise such as consulting firms will also stand to benefit through the big fees that they charge. The common Malaysian though would be adversely affected. There will be a loss of jobs and higher unemployment would only create longer-term structural issues for the Malaysian economy through reduced consumption and demand.
S&P refers to cannibalisation of the market, which is intrusive by nature. The problems of the global economy can be attributed to the loss of influence of consumers. Consumers should have choices so that the best products could serve society.
By restricting the number of products in the market, it creates inefficiencies and is against the very principle of free markets that organisations such as S&P espouse. Organisations such as S&P should not blow hot and cold and should not work against the interest of Malaysians and the Malaysian economy.
It takes political will to resist the influence of the neo-liberal agenda, which continues to cause problems for the 99%. Thus, the Malaysian Trades Union Congress urges the Malaysian government to stand up to protect the interest of the Malaysian worker and the Malaysian economy.
J. Solomon is the secretary-general of Malaysian Trade Union Congress.
VIDEO INSIDE Police reshuffle in preparation for GE14, SEA Games, says IGP Nawar Firdaws Read More FMT BAHASAFMT BORNEO+FMT VIDEOCONTRIBUTE NEWS HOMENATIONOPINIONWORLDLEISURESPORTSBUSI NESSADVERTISE WITH US  4 1 0 5 Standard & Poor’s trying to mislead Malaysians? July 6, 2017 S&P speaks in terms that the consolidation of the banking industry, with the consequence of creating larger banks, is good for the economy. How can this be the case? COMMENT By J. Solomon A media report on 29 June 2017 citing Standard & Poor’s Global Ratings (S&P) is both concerning and expected. S&P, in representing the corporate world and the failed neo-liberal agenda, has questioned the political will to push through with the proposed RHB-AMMB merger. The National Union of Bank Employees (NUBE) and the Malaysian Trades Union Congress (MTUC) roundly condemns the efforts of mergers and take-overs that result in not just social issues such as loss of jobs but also economic ones in the longer term. S&P speaks in terms that the consolidation of the banking industry, with the consequence of creating larger banks, is good for the economy. How can this be the case and why is an organisation such as S&P trying to mislead Malaysians? What is the agenda of S&P? The Global Financial Crisis of 2008 had taught us a few things, chief among them being that the size of banks and the brazen speculative behavior of such banks was the main cause of the financial crisis. It was the taxpayer that had to eventually bail out big banks, and the economy as a whole. How is creating such risks for the Malaysian economy, in terms of a RHB-AMMB merger going to benefit Malaysians and the Malaysian economy? It will have an immediate benefit on the share prices and executive compensation. Organisations involved in the exercise such as consulting firms will also stand to benefit through the big fees that they charge. The common Malaysian though would be adversely affected. There will be a loss of jobs and higher unemployment would only create longer-term structural issues for the Malaysian economy through reduced consumption and demand. S&P refers to cannibalisation of the market, which is intrusive by nature. The problems of the global economy can be attributed to the loss of influence of consumers. Consumers should have choices so that the best products could serve society. By restricting the number of products in the market, it creates inefficiencies and is against the very principle of free markets that organisations such as S&P espouse. Organisations such as S&P should not blow hot and cold and should not work against the interest of Malaysians and the Malaysian economy. It takes political will to resist the influence of the neo-liberal agenda, which continues to cause problems for the 99%. Thus, the Malaysian Trades Union Congress urges the Malaysian government to stand up to protect the interest of the Malaysian worker and the Malaysian economy. J. Solomon is the secretary-general of Malaysian Trade Union Congress.

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Re: STD&POOR
« Reply #2 on: July 07, 2017, 07:08:34 AM »




標普:亚洲再爆金融风暴机会微
財经 最后更新 2017年07月6日 19时14分
標普:亚洲再爆金融风暴机会微

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(香港6日讯)今年是 1997年亚洲金融风暴20周年,標准普尔主权评级资深董事陈金英(译音)预料,下一场亚洲金融市场风暴较大机会由流动性引起,而非资產质素导致,不过他认为现时出现金融危机的机会不大。

香港《文匯报》报导,陈金英指出,如果信贷增长快过存款或其他资金来源等流动性的增长,会减少政府用作抵御外来衝击的政策空间,即使金融体系资產负债表相对健康,流动性出现问题会令市场突然失去信心,引发金融风暴。不过,现时东亚地区的流动性比 1997 年为佳,不少国家有財政盈余,发生金融危机的机会不大。

標普亚太地区分析和研究主管陈泰利(译音)亦指出,与 20 年前比较,亚洲国家已採用了较有弹性的匯率制度和更多的財政储备,控制外债的能力亦较 20 年前佳,因外来衝击而受损的情况比以往少,虽然「亚洲四小虎」中印尼、马来西亚、泰国的信贷评级还未回復金融危机前的水平,但香港已获得比 20 年前更高的评级。

此外,隨著中国经济增长,亚洲国家加深对华经济连繫,中国成为亚洲出口商的需求来源,区內银行的焦点亦由 20 年前的东南亚和韩国,转移至中国和印度。標普指出,2008 年亚洲在金融海啸中相对平稳,中国是其中一个主要因素。

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Re: STD&POOR
« Reply #2 on: July 07, 2017, 07:08:34 AM »