KUALA LUMPUR, April 7— The Association of Banks in Malaysia (ABM) has denied the Real Estate and Housing Developers Association’s (REHDA) claims that the rejection rate for affordable housing loan applications is high.
ABM Chairman, who is also Malayan Banking Bhd (Maybank) Group President and Chief Executive Officer, Datuk Abdul Farid Alias, said out of 456,000 housing loan applications received by the industry last year, only 92,000 or 20.39% were rejected, instead of over 50% as claimed by REHDA.
“For loans with principal amount of less than RM500,000, rejection rate by the industry last year was 19 per cent; for RM500,000-RM1 million range, the rejection rate was 20.71%; RM1 million-RM3 million range at 25%; and for loans above RM3 million at 36%,” he told a press conference after Maybank’s annual general meeting here, today.
Abdul Farid said the main reasons for these rejections were that borrowers exceeded their debt service ratio, high gearing at the borrowers’ level and failure to establish the borrowers’ repayment capability.
Year-to-date, he said the rejection rate for the industry stood at 20.6% and this would likely be higher this year considering the slower economic growth.
Commenting on some analysts’ gloomy outlook for Malaysia, he said the management of asset quality in Malaysia was holding up, attributed to Bank Negara Malaysia’s responsible guidelines.
Echoing Abdul Farid’s sentiment, Maybank Group Chief Financial Officer, Mohamed Rafique Merican, said foreign funds were beginning to come back into the market, which reflected a return of confidence.
Going forward, Chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said Maybank aimed to solidify its position in ASEAN, as well as to be the region’s leading financial services provider with the introduction of Maybank 2020 Strategic Objectives.
Under the new plan, Maybank aims to be the top ASEAN Community Bank, the leading ASEAN wholesale bank linking Asia, leading ASEAN insurer, the global leader in Islamic finance and to be the digital bank of choice.
Abdul Farid said 2016 had already seen the group strengthening its footprint in the region with the opening of a second branch in Laos and a new 10-storey office tower in Cambodia.
“We will soon be opening a new branch in Shenzhen, our fifth in China, as we seek to tap into the ASEAN and China trade flows,” he added.