Page 42 - Bank-Muamalat-Annual-Report-2021

40 BANK MUAMALAT MALAYSIA BERHAD
ABOUT US OUR LEADERSHIP OUR STRATEGY OUR PERFORMANCE

MARKET AND
INDUSTRY OVERVIEW

The Financial Sector Blueprint 2022-2026 which was released Another factor that would impact local businesses and the
earlier this year could further supplement the current banking economy is the Prime Minister's recent announcement
infrastructure and was critical to for the financial sector to regarding the minimum wage for employees being raised from
navigate the oncoming challenge and opportunities and in RM1,200 to RM1,500 a month, with effect from May 1, 2022.
turn, complement the 12MP. The 5-year blueprint that outlines A higher wage structure will result in an increase in disposable
the vision and strategies for the development of the nation’s income for the B50 group, as well as boost the economy,
financial sector focuses on the key expected outcomes including due to the increase in wages resulting in higher consumer
advancing digitalisation of the financial sector, providing spending.
diverse choices and access for consumers, vibrant and dynamic
The performance of Malaysia’s banking sector is expected
funding ecosystem to address Malaysia’s economic needs,
to improve due to the reopening of the economical sectors,
wider adoption of VBI and smooth transition of green
with experts strongly believing that banks will chart an
financing.
estimated financing/loan growth of 5% this year (2021: +4.5%).
th
Source: Economic Planning Unit - 12 Malaysian Plan 2021-2025, The banking system’s gross impaired financing/loan (GIF/GIL)
Ministry of Finance - Economic Outlook 2022
ratio could rise to 2.5% by end-2022 (end-2021: 1.4%), while
the funding and liquidity profiles of banks are expected to
However, 2022 will also be a year of high input costs and
remain supportive of new lending/financing.
demand, with headline inflation projected to average between
2.2% and 3.2%. Underlying inflation is expected to average Banks’ underlying asset quality will unfold when the bulk of
between 2.0 to 3.0%, trending higher. relief under the PEMULIH stimulus programme expires in 1H
2022, while capital buffers will stay robust. The uplift from
The existing price control measures and the continued spare
transitional arrangements will taper off this year.
capacity in the economy are expected to be key factors that
contain upward pressure on prices. Nevertheless, the inflation
Additionally, the Monetary Policy Committee (MPC) of Bank
outlook remains subject to commodity price developments
Negara Malaysia decided to increase the Overnight Policy
that may arise from the military conflict in Ukraine as well as
Rate (OPR) by 25 basis points to 2.00% on 11 May, which will
ongoing supply chain disruptions. It is also contingent on
increase monthly instalment rates. At the same time, the ceiling
domestic policy measures on administered prices.
and floor rates of the corridor of the OPR are correspondingly
increased to 2.25% and 1.75% respectively.
In line with the endemic phase and the further easing of
restrictions, investment activity and prospects have also
Source: 2022 Monetary Policy Statement - Bank Negara Malaysia
improved, underpinned by the realisation of multi-year projects
and a positive growth outlook. Despite these positive signs,
there are still potential risks that may hinder growth, with some
of the prominent threats including a weaker-than-expected
global growth, further escalation of geopolitical conflicts,
worsening supply chain disruptions, and the unpredictable
development of COVID-19.
Source: 2022 Monetary Policy Statement - Bank Negara Malaysia