Latest news with #BankNegara
The Star
4 hours ago
- Business
- The Star
Alliance Bank cautious on FY26 growth outlook
Alliance Bank Malaysia Bhd group chief executive officer Kellee Kam. KUALA LUMPUR: The revision of Malaysia's gross domestic product (GDP) growth for this year to between 4% and 4.8% by Bank Negara is considered decent, says Alliance Bank Malaysia Bhd . On Monday, the central bank had lowered its GDP projection for this year from between 4.5% and 5.5% to between 4% and 4.8%, taking into account potential tariff impacts and other external risks. 'We believe that the 4% to 4.8% range is still a pretty decent number for the Malaysian economy,' said Alliance Bank group chief executive officer Kellee Kam during a press conference held in conjunction with the bank's AGM and EGM yesterday. Despite the downward revision, Kam said the broader macroeconomic landscape continues to show resilience, supported by firm domestic demand, a low unemployment rate, healthy industrial production and stronger-than-expected tourist arrivals. 'These are positive indicators that provide some level of support to the economy. From an asset-quality standpoint, we believe the situation is still quite manageable this year,' he said. On the overnight policy rate (OPR) cut earlier this month, Kam said it is expected to compress the bank's net interest margin (NIM) by about three basis points. For its financial year ended March 31, 2025 (FY25), Alliance Bank recorded NIM of 2.45% and is maintaining its guidance at between 2.4% and 2.45% for its current financial year. 'Logically, when the OPR comes down, there may be an increase in business and lending. But this has to be balanced prudently with the changing macroeconomic landscape,' he said. He added that while the OPR cut may offer some relief, the operating environment remains challenging due to rising business costs and continued uncertainty around tariff developments. He noted that discussions around tariffs are still ongoing and outcomes may take time to materialise. Looking ahead, the bank remains cautiously optimistic about its performance outlook for its financial year ending March 31, 2026 (FY26). 'Earlier this year, we were optimistic. But as events continue to unfold, we are now approaching the outlook with a bit more caution,' he said. Alliance Bank is projecting loan growth of between 8% and 10% for its consumer segment in FY26, a moderation from the double-digit growth of 12% to 14% achieved over the past two years. Kam said the bank expects to end the year closer to the lower end of that range. 'We are being slightly more careful this year, especially in view of the tariff discussions and the impact of the wider scope of the sales and service tax,' he said. Despite the more guarded stance, he said Alliance Bank would continue supporting its core segments, which include small and medium enterprises, mid-market businesses, commercial clients and individual consumers. On asset quality, the bank is maintaining its credit cost guidance at between 30 and 35 basis points, which he said is sufficient to absorb any potential volatility. 'For FY25, we closed at around 31.9 basis points and it was trending the right way. But because of the uncertainties on some of the discussions around tariffs, we will maintain that range of 30 to 35 basis points. That should provide a sufficient range to cater to any potential unforeseen issues,' he added. In FY25, Alliance Bank posted a higher net profit of RM750.73mil or basic earnings per share of 48.49 sen, as well as a revenue of RM2.27bil. This was up from a net profit and revenue of RM690.48mil and RM2.02bil recorded respectively in the previous year.
The Star
9 hours ago
- Health
- The Star
Govt reviewing laws to support RESET strategy
KUALA LUMPUR: Existing legislation, including a proposed amendment to the Private Healthcare Facilities and Services Act, is being reviewed to support the implementation of a strategy aimed at curbing private healthcare inflation, says Prime Minister Datuk Seri Anwar Ibrahim ( pic ). He said the Health Ministry was refining the legal framework to enable initiatives under the RESET strategy. This included the introduction of the diagnosis-related group (DRG) payment system, which required the sharing of minimum clinical and financial information to promote transparency and improve cost management. 'If necessary, the government will consider amendments to other related laws to empower the overall RESET strategy,' he said in a written parliamentary reply. RESET, introduced through a joint effort by Bank Negara, and health and finance ministries, aimed to address the rising cost of healthcare and private insurance. Anwar said the five pillars of RESET included revamping medical and health insurance and takaful (MHIT) by introducing a basic MHIT product to allow for more sustainable and stable premium pricing. The initiative would also enhance price transparency through drug price display and publication of service price ranges, as well as consistent medical inflation estimates and standardised healthcare cost data collection. 'Through RESET, the digital health ecosystem will be strengthened via electronic medical records to improve care quality and reduce repeated diagnostic testing. 'The fourth pillar is expanding cost-effective options through affordable non-profit hospitals and public-private partnerships with the Health Ministry. 'Lastly, we aim to transform provider payment mechanisms by shifting to the DRG system to align cost payments with value-based care,' he said. The rollout of RESET is overseen by the Private Healthcare Costs joint ministerial committee, co-chaired by the Finance Minister II and Health Minister, he added. The inaugural session, held on June 24, included stakeholders from private hospitals, healthcare professionals, insurers, consumer groups and academia.
The Star
9 hours ago
- Business
- The Star
Experts: Be wise with extra cash
Bank Negara's rate cut could turn savings into emergency funds PETALING JAYA: Bank Negara's interest rate cut offers Malaysians a chance to turn small savings from loan repayments into emergency funds, transforming immediate cash flow into lasting stability, say financial and consumer groups. They said the recent 0.25% reduction in the Overnight Policy Rate (OPR) by Bank Negara could be seen as a golden opportunity for Malaysians to bolster their financial resilience. 'For typical RM300,000 and RM500,000 home loans on a floating rate, you're looking at saving about RM43 to RM73 every month,' said Alex Tan, the president of the Financial Planning Association of Malaysia. 'Over a year, these savings translate to over RM500 to RM900 that can be channelled into building an emergency fund or paying down higher-interest debts,' he told The Star in an interview. Likening the additional liquidity to 'a small bonus every month', Tan said the key question is what we are doing with it. 'Transferring the difference to somewhere productive, like an emergency fund or a high-interest savings account, can significantly improve our financial situation. He advised Malaysians to build emergency funds that cover three to six months of living expenses for individuals, and six to 12 months for families with dependents. 'This isn't extra' money for spending; it's an opportunity to strengthen our financial foundation.' Tan also recommended starting with a self-financial audit to identify savings opportunities and using windfalls wisely to boost emergency savings. 'The families who resist the temptation of instant gratification and channel these savings strategically will be much better positioned for whatever comes next. CLICK TO ENLARGE 'It's about changing your mindset from 'I can afford more now' to 'I can secure more now',' he added. Licensed financial planner Rafiq Hidayat Mohd Ramli urged Malaysians to avoid the pitfall of lifestyle inflation. 'This is a moment where better choices can lead to better outcomes. 'Use the extra breathing room to build an emergency fund, not to upgrade your phone or splurge unnecessarily.' While the savings may not seem much, he said, 'for a 30-year mortgage, we're talking about thousands of ringgit in total interest savings'. He said emergency funds can be useful during costly unforeseen events such as job loss, medical emergencies or vehicle repairs. To maximise the benefits of the rate cut, Rafiq advised consumers to 'track and trim expenses to identify savings opportunities and automate your savings to ensure consistency.' While interest rate cuts are temporary, smart financial habits are lasting, he said. 'With inflation and economic uncertainties still looming, now is the time to build buffers, not burdens. 'The goal is long-term stability, not short-term gratification. Let your savings serve your future.' Federation of Malaysian Consumers Associations (Fomca) chief executive officer Saravanan Thambirajah said Malaysians' financial preparedness remains alarmingly low, despite increased awareness about the importance of emergency savings. 'Many Malaysians still lack the funds to endure even brief income disruptions,' he said, citing surveys that show a significant number of adults couldn't cover basic expenses beyond a month without their primary income. He pointed out that short-term financial thinking and consumption-driven lifestyles are prevalent. 'Cultural pressures often equate success with material wealth, leading many to spend beyond their means,' he said. Financial literacy gaps also persist, especially among youth, gig workers and rural folk. 'Without structured savings tools, people often end up saving nothing.' Saravanan urged consumers to use the recent interest rate cut wisely and get educated on its benefits. 'Fomca publishes a bi-monthly magazine, Ringgit, to help Malaysians make informed financial decisions. Educating consumers is crucial to improving financial security,' he added.
The Star
10 hours ago
- Business
- The Star
Good news for SMEs with cash flow problems
PETALING JAYA: Amid global uncertainty, Bank Negara's rate cut provides SMEs a crucial boost, prompting better cash flow management and emergency fund planning, says an industry leader group. SME Association of Malaysia president Dr Chin Chee Seong said the revision is 'timely' and is expected to stimulate the economy by boosting domestic demand. 'While economic indicators suggest growth, the reality on the ground often tells a different story. 'The reduction in the Overnight Policy Rate (OPR) is a positive development that SMEs are beginning to see,' he said in an interview yesterday. Chin said the drop in borrowing costs can significantly improve cash flow for businesses reliant on loans. 'Although the amount may not be substantial, it provides a critical buffer for SMEs, which are the backbone of our economy,' he said. 'We learned during the Covid-19 pandemic the importance of maintaining cash flow.' According to Financial Planning Association of Malaysia president Alex Tan, the rate cut could be good news for SMEs with cash flow problems. 'For business owners with variable-rate term loans, every RM100,000 of borrowing saves them roughly RM12-RM13 monthly. This might seem small, but it can add up and provide breathing room for SMEs managing tight cash flows,' he said. Businesses, he said, should consider using these savings to reinvest in growth, build a financial buffer or pare down other debts. 'This strategic use of extra cash flow can enhance long-term stability and resilience against economic fluctuations,' he added. Chin, however, cautioned that other rising costs, such as the expanded Sales and Service Tax (SST), higher rental and leasing rates and soaring logistics costs, continue to challenge SMEs, particularly those in the retail, food and beverage, and logistics sectors. 'Despite the interest rate cut, many SMEs face persistent challenges. It's crucial for SMEs to create emergency funds to withstand economic fluctuations and sudden cost increases,' he said. Highlighting the importance of financial education for SMEs, he said many are still recovering from past economic shocks and operate on tight margins. 'Ongoing education is necessary. SMEs need to maintain reserves that can sustain operations for at least three to eight months, ideally six to 12 months, to withstand economic impacts or sales fluctuations,' he said. In light of global economic uncertainty, Chin called on SMEs to prepare for the expanded SST and prioritise building emergency funds. 'With the OPR reduction, it's important for SMEs to plan and focus on reserving cash flow and becoming more resilient to economic changes,' he said.
The Star
13 hours ago
- Business
- The Star
Bank Negara imposes penalties on three lenders
KUALA LUMPUR: Bank Negara has imposed administrative monetary penalties (AMP) totalling RM3.445mil on Bank Islam Malaysia Bhd (BIMB) for non-compliance with the Islamic Financial Services Act 2013 (IFSA) and relevant policy documents. The relevant policy documents include Risk Management in Technology Policy Document (RMiT PD) and Anti-Money Laundering Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document, the central bank said in a statement yesterday. Bank Negara said BIMB paid RM1.70mil for the AMP imposed on May 29, for sanction-screening breaches and RM1.745mil for the AMP imposed on June 30, for prolonged service disruptions. Separately, the central bank said it imposed an AMP of RM2.85mil on Bank Kerjasama Rakyat Malaysia Bhd (BKRM) for non-compliance with the Development Financial Institutions Act 2002 (DFIA) and RMiT PD. It said BKRM paid RM2.85mil for the AMP imposed on June 26. Apart from that, Bank Negara also said it imposed an AMP of RM995,000 on Bank Simpanan Nasional (BSN) for non-compliance with the DFIA and RMiT PD. BSN paid RM995,000 for the AMP imposed on June 25, 2025, Bank Negara said. — Bernama
