In a research note, analyst Desmond Ch’ng said loan applications for July rose 6% year-on-year (y-o-y), led by growth in automotive, mortgage and working capital loan applications.

“Automotive loan applications jumped 64% y-o-y (to RM9.7 billion) in July, while mortgage applications rose 19% y-o-y (to RM29.9 billion), aided by, we believe, the Penjana recovery plan, which contains relaxation measures for the housing and automotive sectors,” he said.

Ch’ng said the incentives for housing included the removal of real property gains tax, stamp duty waivers and a zero loan-to-value cap on third properties or more.

For cars, the government has introduced 50% and 100% sales and service tax exemptions for new purchases.

On current account savings account (Casa) growth, he said it was stable at 4.2% in July, compared with 4.3% in June.

“The upward surge in Casa growth has continued, rising 18.4% y-o-y in July,” he said.

“This is overall positive for the banks in managing their funding costs and improving their margins.”