Tuesday, March 9, 2010

“Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)” plus 2 more

“Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)” plus 2 more

Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)

Posted: 09 Mar 2010 06:39 AM PST

More consumer loans sourced from universal, commercial and thrift banks were recorded in the fourth quarter of last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

As of end-December 2009, the consumer loans (CLs) of universal/commercial banks (U/KBs) and thrift banks (TBs) reached P413.1 billion, higher by 3.2 percent than last quarter's P400.1 billion and by 8.7 percent than last year's P380.0 billion.

Meantime, the proportion of total CLs to total loan portfolio (TLP), exclusive of interbank loans dropped to 15.2 percent from last quarter's 16.0 percent but went up from last year's 14.8 percent ratio.

By type of CLs, Residential Real Estate Loans accounted for the bulk of total CLs at 39.4 percent or P162.6 billion.

Credit Card Receivables came second with a share of 27.9 percent or P115.5 billion.

Auto Loans and Other Consumer Loans followed with shares of 22.9 percent or P94.5 billion and 9.8 percent or P40.5 billion, respectively.

By industry, U/KBs held the majority of the banking industry's total CLs at 60.3 percent or P249.2 billion.

TBs accounted for the remaining share of 39.7 percent or P163.9 billion.

Loan quality improved as the ratio of non-performing CLs to total CLs of U/KBs and TBs dropped to 9.0 percent from last quarter's 9.2 percent but rose from last year's 8.6 percent ratio.

BSP said that the easing of the ratio from last quarter occurred as the growth in non-performing CLs was outweighed by the larger expansion in total CLs.

Non-performing CLs settled at P37.3 billion, up by 0.7 percent or P0.3 billion from last quarter.

Meantime, the non-performing CLs to total non-performing loans (NPL) ratio stood at 29.2 percent, up from 28.0 percent last quarter and 25.3 percent last year.

Meanwhile, non-performing CLs to TLP ratio settled at 1.4 percent, easing from 1.5 percent last quarter but up from 1.3 percent last year.

As of end-December 2009, other consumer loans (Other CLs) of U/KBs and TBs amounted to P40.5 billion, up by 10.4 percent from last quarter and by 9.4 percent from last year.

The proportion of Other CLs to TLP, exclusive of interbank loans stood at 1.5 percent, same as last quarter but slightly up from last year's 1.4 percent ratio.

Other CLs refer to loans granted to individuals to finance other personal and household needs such as purchase of household appliances, furniture and fixtures and/or to pay taxes, hospital and educational bills.

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CIMB to maintain loans growth (MalaysiaNews.net)

Posted: 08 Mar 2010 05:50 PM PST


It targets 12% despite a higher interest rate environment

PETALING JAYA: CIMB banking group is maintaining a loans growth target of 12% this year despite a higher interest rate environment.

According to group chief executive officer (CEO) Datuk Seri Nazir Razak, the estimated loans growth for the whole group is 12% with the Malaysian operations targeting a 10% loans growth and a higher percentage for its overseas operations.

Last year, CIMB group achieved a loans growth of some 11% versus its target of 8%.

"I don't think the higher interest rate environment will impact loans growth. What is happening is an uptick in interest rates to normal levels. It is still conducive to loan demand and still financially reasonable for businesses to borrow," he told reporters at the launch of CIMB Twin Yield Income Investment structured product yesterday.

Nazir said the group experienced a slowdown in loans growth in the small- and medium-scale enterprise segment last year but with a more favourable business environment, "loan demand from the segment will be stronger."

The group's loans growth is also expected to be driven by mortgage sales, personal loans and the credit card businesses.

Nazir said the group's non-performing loan (NPL) ratio had improved as a whole to 2% currently while the NPL ratio for CIMB Bank was 1.2%.

"The year has started quite well for us. We have quite good prospects this year," he said, adding that the group had a target of 16% return on equity.

The banking group posted a 43.8% increase in net profit to RM2.81bil, or 79.51 sen per share, for the financial year (FY) ended Dec 31, 2009 from RM1.95bil in 2008. Revenue climbed 37.8% to RM10.67bil in FY09 from RM7.74bil previously.

On merger and acquisition (M&A) plans this year, Nazir said: "There are no M&A plans this year. We are very focused on integrating our regional platform. There is still a lot more value to be derived by pooling our businesses together. So our focus this year is integration not acquisition."

Meanwhile, CIMB group deputy CEO (group treasury and investments) Datuk Lee K. Kwan said the CIMB Twin Yield Income Investment structured product combined fixed income returns with equity dividend returns.

"The product aims to pay a minimum cumulative average annualised fixed income return of 4.88% half-yearly for 10 years. It also has the potential to earn additional uncapped variable returns annually, with an average dividend yield rate of 0.9%, adjusted for price movements of the variable underlyings," he added.

The fixed income returns is referenced to CIMB Group's AA3 rated subordinated note while the variable equity based dividends are from markets the group is in, namely the MSCI Indonesia Index, Thailand SET 50 Index, MSCI Malaysia Free Index, MSCI Singapore Cash Index and the S&P GSCI Excess Return Index.

The minimum investment amount is RM250,000 and subsequently in multiples of RM5,000. The product is open for subscription up to a limited amount of RM300mil with the offer period ending on March 26.


CIMB : [Stock Watch] [News]


For latest Bursa Malaysia indices, charts and other information click here

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Use windfall to pay down steep student loans (Austin American-Statesman)

Posted: 08 Mar 2010 05:22 PM PST

I am about to receive a $100,000 bonus for work I did several years ago. I need help deciding what to do with the money.

I am 31 years old, single, female and a lawyer. My salary is $70,000. I usually get about a $12,000 bonus. I have a private student loan of $76,000 with a variable rate currently at 4.2 percent. I also have a $10,500 variable rate private loan currently at 6.7 percent. My federal student loan for $58,000 is fixed at 5.25 percent. I pay about $1,000 a month on the student loans and $1,450 a month for my mortgage and HOA fees. I have no car payment and no credit card debt. I have $3,000 in a Roth IRA, which is my only retirement. I also have about $4,000 in savings.

What should I do?

I'm tempted to pay off a lot of the variable rate student loans even though they are at such low interest rates — just to make them go away. I've heard that if a debt costs less than 6 percent interest, you should invest the money and just pay the minimum on the debt. Does that logic apply to variable rate loans if the rate goes up?

I want to max out my Roth IRA for 2009 (assuming my bonus comes in before April) and 2010. And I want to put some money in savings — I was thinking $12,000, but not sure. And should I put it in CDs so I can access it when/if I need it? I work for my stepfather, so I don't foresee being laid off. That's also why I don't plan on having a super big rainy day fund — I would rather pay off the loans that are hanging over my head.

— L.D., by e-mail

That $144,500 is a lot of student debt. It will limit your personal choices as long as you carry it. While the temptation may be to let inflation whittle it away, the prospect of paying $1,000 a month for another 20 years is pretty grim.

Worse, the principal must be repaid with after-tax dollars. So it could cost more if you delay. Since you pay the 15.3 percent employment tax and also pay income taxes at 25 percent, you need to earn about $1.67 to pay off a dollar of debt. Worse, since your income appears to disqualify you from taking the interest as a deduction, you have to earn $1.67 to pay back a dollar of interest as well.

That's not debt you want to carry.

You can cut the repayment period to about 15 years by adding about $150 a month. It will take a bit over $500 a month of extra payment to bring the payback down to 10 years. Using that bonus cash, of course, will give you a big start.

Begin with the high-rate, 6.7 percent variable note. Pay that off first. Then pay as much as you can on your $76,000 variable note at 4.2 percent. That will reduce your vulnerability to rising interest rates in the future.

I have the opportunity to convert my IRAs to Roth IRAs this year. I will have to start withdrawing funds in 2011 when I turn 70½. I have the cash to convert some, but not all. The Roth IRAs do not require yearly withdrawals. It seems I should do the conversion and take the hit now, and thus have fewer requirements for withdrawals in the future. I would not convert so much as to make me 'cash poor.'

— K.B., by e-mail

For many people, there is no advantage to converting. Basically, they can pay taxes now or pay taxes later. It won't make a big difference to their standard of living either way.

If converting will allow you to have virtually all of your financial assets in a Roth and not have much in a conventional IRA, you may be able to escape the possible taxation of Social Security benefits.

Why? Because Roth withdrawals are not counted in the income computation that makes Social Security benefits taxable. This is a complicated calculation, so I'd suggest visiting with a good tax accountant.

Questions about personal finance and investments may be sent to scott@scottburns.com.

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Posted by Rakhma at 4:06 PM

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