Latest news with #RM9.3bil
The Star
21-07-2025
- Business
- The Star
Rise in 'buy now, pay later' accounts puts vulnerable consumers at risk, says Finance Ministry
KUALA LUMPUR: A total of 1.4 million "buy now, pay later" (BNPL) accounts have been registered by credit providers in just the first six months of 2025, says Deputy Finance Minister Lim Hui Ying. She said that the drastic growth of BNPL accounts poses a risk to vulnerable credit consumers, particularly those without fixed incomes or with poor financial literacy. "The volume of BNPL transactions increased from 83.8 million transactions in the second half of 2024 to 102.6 million transactions in the first quarter of 2025," she said when tabling the Consumer Credit Bill for second reading in Parliament on Monday (July 21). She said the total value of BNPL transactions also increased from RM7.1bil in the second half of 2024 to RM9.3bil for the first quarter of this year, representing a 31% increase. "The number of active BNPL accounts has also increased from 5.1 million accounts at the end of 2024 to 6.5 million accounts as of June 2025," she said. Lim said laws are needed to supervise the consumer credit industry as there are currently providers that are not regulated under the law. She said this has lead to businesses that target vulnerable consumers, with some engaging debt collectors and some resorting to threats and extreme intimidation. She said the Credit Consumers Bill would help supervise the growing industry to act in a more transparent and responsible manner Among the provisions is the establishment of a Consumer Credit Commission (CCC) as the new authority regulating non-bank credit providers and credit service providers in the country, she said. The Credit Consumers Bill was tabled in Dewan Rakyat for its first reading in March this year and is expected to be passed by the Lower House later on Monday.
The Star
14-07-2025
- Business
- The Star
Banks poised for stable margins in second quarter
PETALING JAYA: Net interest margins (NIM) of local banks are likely to remain stable in the second quarter of 2025 (2Q25), with a slight increase expected, as they benefit from improved liquidity following Bank Negara's recent reduction of the statutory reserve requirement (SRR) from 2% to 1% effective May 16. Building on this, analysts estimate that the SRR cut has released about RM19bil in liquidity into the banking system. CGSI Research said banks could have benefitted from additional interest income earned from the funds released, potentially lifting banks' net interest income (NII) growth. 'With this, banks' NIM could be stable quarter-on-quarter (q-o-q) in 2Q25 with an upward bias. As a preview of 2Q25 financial results, we expect core net profit of banks under our coverage to come in at between RM9.2bil and RM9.3bil, slightly below the RM9.37bil recorded in 1Q25,' CGSI Research said in a report. The research firm said it was not overly concerned about the potential q-o-q upturn in loan loss provisioning (LLP) in 2Q25, as the credit charge-off rate is likely to remain low at about 15 basis points, which is below the pre-Covid-19 level of 25 basis points. As for loans, growth is expected to come in at 5% year-on-year (y-o-y) by end-June 2025, slightly lower than the 5.2% recorded at end-March. According to CGSI Research, loan growth in the banking sector showed a V-shaped pattern, easing to 5.1% y-o-y at end-April 2025 before recovering to 5.3% by end-May. This was driven by fluctuations in business loan growth, which slowed from 4.8% y-o-y in March to 4.6% in April, then picked up to 5% in May. In contrast, household loan growth remained steady at around 5.9% throughout the three months. Meanwhile, the research firm expects the gross impaired loan ratio to be around 1.45% at end-June 2025, roughly in line with 1.42% at end-March. Going back to 1Q25, CGSI Research said three banks, namely, Hong Leong Bank Bhd (HLB), Affin Bank Bhd and Alliance Bank Malaysia Bhd , had recorded double-digit y-o-y core net profit growth, which was primarily driven by lower LLP. Noteworthy too was that Malayan Banking Bhd delivered a record-high core net profit of RM2.59bil in 1Q25, thanks to a 17.9% drop in LLP. HLB's core net profit of RM1.35bil in 1Q25 was also an all-time high, but this was lifted by a RM399mil write-back in management overlay, said the research firm. Ongoing write-backs of management overlays by banks are the potential re-rating catalyst for the sector. This, along with expectations of higher dividend payout ratios by most banks, supports CGSI Research's 'overweight' rating on bank stocks.
