In a research note, the bank said the industry loan growth expanded by 6% year-on-year (y-o-y) in March 2024 versus 5.8% in February 2024, driven by stronger growth in household and non-household loans.

“Household loan growth was marginally higher at 6.3% y-o-y in March 2024 compared to 6.2% a month before, with sustained growth in mortgage and personal loans,” it said.

The bank noted that non-household loan growth in March 2024 rose to 5.5% y-o-y from 5.3% in February 2024, mainly attributed to a stronger pace of financing to the transportation, storage, communication, finance, insurance and business services sectors.

“Momentum for loan applications remained slow, but March 2024 saw an improvement in approvals of non-household loans.

“Movement in the overall banking system loan approvals was negative 12.3% y-o-y in March 2024 versus negative 18.6% y-o-y in February 2024,” it said.

AmInvestment Bank said loan impairments and provisions declined in March 2024.

“The industry’s gross impaired loan and net impaired loan remained stable at 1.6% and 1.1%, respectively.

“The industry’s outstanding impaired loans fell by 0.7% month-on-month or RM259 million in March 2024,” it noted.

Overall, the bank maintained a “neutral” call on the sector. It also expects the overnight policy rate (OPR) to remain at 3% during the next Monetary Policy Committee meeting on May 9.