The banking sector's loan growth is expected to taper off in the coming months following clear signs of a slowdown in momentum due to rising global uncertainties, says ECM Libra Investment Research.

In an update on banking sector, ECM Libra said the growth momentum of all three lending indicators slowed considerably in July.

It said month-on-month growth rate of loan applications, loan approvals and disbursements dropped to RM65.3 billion (-5.3 per cent), RM32.2 billion (-15.4 per cent) and RM64.1 billion (-13.8 per cent), respectively.

"Year-to-date annualised loan growth decelerated to 13.6 per cent from 14.6 per cent in June, dampened by increased global uncertainties and gradual monetary tightening by Bank Negara Malaysia," it said.

ECM Libra said property loans remained the key growth driver.

"However, the growth momentum of property loans was expected to taper off going forward with the May increase in overnight policy rate starting to take effect and a more stringent credit policy instigated by banks," it said. – Bernama

SOURCE: Business Times