KUALA LUMPUR (Dec 13): Fitch Ratings maintained its "negative" outlook on Malaysian banks on expectation of weak loan demand and asset-quality risk from oil and gas exposure.
In a note today, bond rating firm Fitch said it also maintained its "negative" outlook on the Thailand and Indonesia banking sectors.
"Most of ASEAN's banking sectors are likely to face weak loan demand and further pressure on asset quality in 2017. Fitch Ratings has maintained its negative banking sector outlook for Indonesia, Malaysia and Thailand, and has moved Singapore's to negative from stable to reflect continued asset-quality risks from oil and gas exposures and broader pressures from a slowing economy.
"Weak global trade, low commodity prices and the slowdown in China's economy have all contributed to a weakening of gross domestic product growth over the last few years across many members of ASEAN," Fitch said.
Fitch said banks in Singapore and Malaysia were more exposed to the oil and gas sector.
According to Fitch, the oil and gas sector was expected to remain tough despite modest recovery in energy prices.
http://www.theedgemarkets.com/en/article/fitch-maintains-negative-outlook-malaysian-banks
