Banking
From The Report: Malaysia 2012
View in Online Reader

Malaysia’s banking sector is well-capitalised and stable, with larger financial institutions now looking at overseas expansion to increase their clout. The regulators’ encouragement of consolidation under the Financial Sector Master Plan, which ended in 2010, reduced the number of banks from around 20 down to 8 major institutions. These have high capital-adequacy ratios and low ratios of non-performing loans, even as they extend a volume of credit equal to 132% of the Malaysia’s GDP. While future mergers could still occur, the larger trend is outward growth, as Malaysian institutions look to the under-banked populations of Indonesia, the Philippines, and Thailand.
This chapter includes interviews with Zeti Akhtar Aziz, Governor of Bank Negara Malaysia; and Nazir Razak, CEO, CIMB Group Holdings.

Articles from this Chapter

Viewpoint

Strong foundations: Zeti Akhtar Aziz, Governor, Bank Negara Malaysia, on regional economic integration
OBG
plus

Asia comprises a highly heterogeneous group of countries, which differ widely in terms of economic structure, natural resources, degree of market orientation, stage of development, size and degree of openness. Given the diverse nature of the region, it would be highly challenging to achieve the necessary preconditions for achieving an integration similar to that seen in Europe, where it was advanced with the establishment of supranational institutions with mandates to promote common approaches and…

Interview

OBG talks to Nazir Razak, CEO, CIMB Group Holdings
OBG
plus

Interview: Nazir Razak What are the obstacles to accelerating development of Malaysia’s corporate bond market? NAZIR RAZAK: Malaysia has arguably the best domestic currency bond market in the developing world. That said, we shouldn’t beat ourselves up so much over the fact that it is illiquid below a certain credit grade. Some reform on the buy side would significantly improve liquidity. Historically, reform measures have been quite focused on intermediaries and exchanges, with little attention…

Analysis

Act II: Following a successful master plan, a new sector blueprint aims high
OBG
plus

The Financial Sector Master plan 2001-10 for Malaysia, written in the wake of 1997-98 crisis and focusing on stability, achieved almost all its goals. The banking sector was consolidated and the country was left with eight sound and solid institutions. Corporate governance and prudent controls were emphasised so Malaysia would not again face the dangerous mismatch of currencies and maturities that had threatened it before. Bond markets were overhauled so the banks would no longer be involved…