• Broad money (M3) grew marginally lower in September
• Loan growth moved at slower pace on yearly basis 
• Loan application lost momentum in September 
• Loan approval rate decreased 
• Impaired loan grew slightly higher September 
• Banking system remained vibrant

Broad money grew marginally lower in September at 5.0% from 5.3% the month before. Fixed deposit, which contributed 47.6% to the total broad money, rose 3.9% in September. Demand deposit and saving deposit increased 11.3% and 5.0% respectively in September. The negotiable instruments of deposit (NID) picked up to 11.7% in September as compared to 8.6% increase in the previous month.

On monthly basis, the broad money continued to grow higher in September at 0.9% (Aug: 0.6%). The narrow money supply or M1 inched up to 11.1% yoy or improved by RM39.7bn in September. Compared to the prior month M1 grew by 10.9%.

Slower loan growth. Loans growth for the banking sector grew at a slower pace of 5.2% in September after accelerating for two consecutive months (Jul: 5.6%, Aug: 5.8%). This was mainly due to slower growth in loans extended to the corporate sector, notably in finance, insurance and business service (Aug: 5.6%; Sep: 2.0%), manufacturing (Aug: 4.6%; Sep: 3.5%), and construction (Aug: 12.5%; Sep: 10.5%). However, real estate picked up to 6.7% in September from 6.2% in August.

Source: BIMB Securities Research - 1 Nov 2017