Malaysian Banks Continue to Record New Non-Performing Loans


In January-June 2000 the six largest listed Malaysian banks recorded new non-performing loans at an annualised rate of 11% on outstanding loans, with the same trend continuing into July. A more normal rate is considered to be in the area of 3%.

The main cause of the problem is reported to be politically based corporations that are already being supervised by the debt restructuring agency set up by the government. They have not yet completed their restructuring programmes and have apparently not yet been able to take advantage of renewed growth in the national economy.

Although opinion is divided as to the reason for their present position, some of these companies are thought to have been able to live on existing reserves until recently. Some observers also believe that until now they may have avoided classification through their political links.

Financial Times



All news and features older than 7 days are subscription only. This article is from the archive. Archived articles could only be accessed with the subscription. If you are a subscriber please log in, alternatively you need to purchase a subscription to view the full content for this page.