Bank loans may grow by about 6 per cent this year, the strongest yet six years after the regional financial crisis.
Loans were growing at 37.1 per cent and 25.9 per cent in 1996 and 1997 respectively, before slumping as banks consolidated their positions in trying to deal with doubtful and bad debts in the wake of the crisis.
Last year's loans grew by 4.8 per cent, while the last time, it grew by more than 5 per cent was in 2000, by 5.4 per cent.
MIDF-Sisma Securities economist Azrul Azwar said this year's loan growth would be driven by increased lending, especially to small- and-medium-scale enterprises (SMEs) and the general consumers.
Azrul said he believes Bank Negara Malaysia would not revise its intervention rate, a determinant for domestic interest rate, soon, thus keeping the prevailing rates low. The current base lending rate is 6 per cent.
