- Some impact seen from the new Responsible LendingGuideline. The new Responsible Lending Guidelines had had some impact on theindustry generally. There appears to be some slowdown in consumer loanapplications and approvals for even up to latest weeks of March 2012.  

- Affin believes the impact is marginal and likely limitedto loan applications and approvals outside of Klang Valley. Affin alluded atits Analysts' Briefing on 16 March that it has not been affected that much bythe new responsible lending guideline as it is already quite stringent in termsof its internal scorecard for autos and mortgage. The company believed thatanyimpact seen is marginal and is probably in relation to auto and mortgageapprovals outside of the Klang Valley.  

- AFG hinted first two months were relatively slower. At ourcompany visit to AFG on 15 March, the company hinted that loan applications andapprovals were slow in January to February, with declines of about 20% MoMcompared to earlier months. The company guesstimated that perhaps 10% to 20% ofthe industry's loan approvals and applications were affected by the newResponsible Lending Guideline. On its side, it believed that it is affectedmore by the shorter working period as Chinese New Year was particularly earlyon 23 January this year. 

- Maybank was pleasantly surprised that February is back tonormal. Maybank alluded that the first initial few months of the year isconsidered to be historically slow based on its track record, as these includedseveral festive holidays. Whilst loans approvals and applications had seenmoderation similar to the industry's in January 2012, the company said that itwas pleasantly surprised that February 2012's trend is now back to normal. Ithas not seen much impact from the new Responsible Lending Guideline.

- PBB sees stable trend if measured on average working daybasis. PBB believed loan applications and approvals were affected in Januaryand February 2012 due partly to shorter working period, which affected the timefor delivery of auto bookings. However, PBB indicated that its February 2012leading loan indicators is stable if measured on an average per working daybasis, as the month also included several holidays. 

- Maintain overweight. We have already modelled in overallloans growth of 6% for 2012 (industry loan growth: 13.6%  2011), thus we are not changing our forecastsbased on the latest feedback from our meetings. On the flip side, the bankshave indicated that there is a healthy pipeline in terms of corporate loans,with up to 50% of the loans approved being largely related to the government'sEconomic Transformation Programme. We maintain overweight on the sector.

Source: AmeSecurities