The general moratorium on loans is not necessary if the foreclosure

With vaccine delivery on the horizon, analysts believe current targeted loan assistance will remain in place


ANALYSTS believe it is highly unlikely that the government and Bank Negara Malaysia will promote another general loan moratorium, although talks of a new form of foreclosure could be instituted across the country this week due to the increase in Covid-19 cases.

With vaccine delivery on the horizon, analysts believe the current targeted loan assistance will remain in place to meet different clients with different needs. Read more here:

MIDF Research chief research officer Imran Yassin Mohd Yusof said the government was better prepared to deal with the situation than when the pandemic first broke out in the country, resulting in restrictions on nationwide movement.

“At the start of the pandemic and the movement control order (MCO) in March 2020, there was a lot of uncertainty, especially if we will be able to get the vaccine.

“Now, however, it is clear that we will get the vaccines, therefore the situation is not as precarious as it used to be. In addition, the government and regulators are more experienced than before in dealing with the pandemic.” , did he declare. Malaysian Reserve (TMR) recently.

Although banks have the balance sheets to absorb another general loan moratorium, Imran Yassin said the move could lead to lower profits, however, which could lead to a credit crunch.

He has a positive view of the outlook for the banking sector due to the expected economic recovery.

“We expect provisions to be lower this year which should help earnings. Lending growth could accelerate alongside the economic recovery, ”he added.

The number of positive cases in the country over the past month did not drop below 1,000 and hit a record high last Thursday with 3,027 people infected.

This has led to rumors of another possible lockdown in the country, or in some states, to curb the spread of the virus, which will impact the recovery from the OLS crisis last March.

According to government officials, the first batch of Pfizer Inc vaccine doses are expected to arrive in Malaysia by February and the amount will be able to cover 20% of the country’s population.

Dr Mohd Afzanizam Abdul Rashid, chief economist of Bank Islam Malaysia Bhd, shares the same point of view as Imran Yassin, adding that there can be no “one size fits all” solution to the issue of loans .

“We learned a good lesson from the loan moratorium last year. There are people who may want to continue paying their financing commitment and there are also borrowers who are in urgent need of help.

“It needs to be targeted, tailored and well suited to each borrower,” he said. VMR.

When asked if there would be a downgrade in the industry, he said the central bank has been vigilant in monitoring the financial condition of institutions on the basis of their active engagement.

He added that banks have their own internal targets, which are usually higher than what is prescribed as a minimum level, whether in terms of capitalization, liquidity or asset quality.

“In that sense, I think the chances of downgrading would probably be quite remote and maybe it’s a unique assessment for each country or region,” he said.

Meanwhile, a general loan moratorium is also not a necessity, as a small segment of borrowers may need some form of assistance.

Another industry expert said VMR these data show that 85% of borrowers resumed their repayments after the end of the moratorium in september.

“The current targeted approach could be fine-tuned perhaps, but should suffice.

“Banks can provide more aid in a targeted manner over a longer period, perhaps vary the repayment terms and leave room for maneuver in certain sectors,” he said.

Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said on Saturday that the government would not impose a national MCO, but instead put in place more stringent standard operating procedures following the increase in Covid cases. 19 in the country.

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