PETALING JAYA: Banking stocks staged a mixed performance after Bank Negara released its monetary and financial developments for September that reflected the probability of waning loans growth momentum, going forward.

CIMB Group Holdings Bhd lost eight sen or 1.06% to RM7.49, AMMB Holdings Bhd slid three sen or 0.50% to RM5.94 and RHB Capital Bhd tumbled 24 sen or 3.12% to RM7.46.

In contrast, Malayan Banking Bhd (Maybank) climbed a sen or 0.12% to RM8.37, Hong Leong Bank Bhd increased 12 sen or 1.13% to RM10.72 and Public Bank Bhd went up four sen or 0.13% to RM12.76.

Maybank's Indonesian subsidiary PT Bank Internasional Indonesia Tbk on Monday announced a 34% increase in net profit to 555 billion rupiah (RM192.25mil) in the first nine months of the year from 415 billion rupiah a year earlier.

Maybank headquarters in Kuala Lumpur. The group’s shares climbed a sen or 0.12% to RM8.37 on Bursa Malaysia yesterday.

ECM Libra Investment Research said although loans growth gained momentum in September as year-to-date annualised growth increased 24 basis points (bps) on a month-on-month basis to 13.4%, loans applications had fallen for three consecutive months, which suggested loans growth might be peaking up soon.

“Lending indicators continued to show weakness as loans applications, approvals and disbursement all fell month-on-month by 6.5%, 9.4% and 2.0% respectively.

“Loans applications, in particular, have fallen for three consecutive months to RM56.8bil, the lowest since March.

“These may suggest that loans growth may be peaking soon,” it said in recent a sectoral update report.

On a brighter note, ECM Libra said that average lending rate spread was showing some stability, indicating margin compression might have bottomed out.

“Margins remain compressed in September although it is showing signs of bottoming out.

“Base lending rate and average lending rate remain constant at 6.54% and 5.05% on a month-on-month basis respectively while average lending rate for three-month fixed-deposit spread is still near a 14-year low at 2.05% in September from 2.04% in August,” it said.

ECM Libra maintained a “neutral” call on the banking sector as loans growth momentum was expected to wane in the months ahead.

Nevertheless, a banking analyst told StarBiz that generally, the lacklustre performance of some banking stocks yesterday were not predominantly influenced by the recent Bank Negara statistics.

“Most investors could be liquidating stocks ahead of the Federal Open Market Committee meeting, the G20 or the US non-farm payroll on Friday.

“A correction is expected after we had a euphoria from the European Union summit last week,” he said, adding that domestic demand for banking was still robust, with system loan outstanding growing at 13.8% year-on-year.

However, he said a couple of indicators such as loans applications and approvals were pointing downwards on a month-on-month basis.

“But this is not worrisome as our economy is still healthy overall and projected to grow at 5% to 6% in 2011, according to Bank Negara's projection.

“Some banks were on prudential lending mode whereby return-on-equity management, preservation of asset quality and asset-liability management dictated their lending activities,” he said.

OSK Research said the loans growth in September, which was an acceleration from 13.3% to 13.8% year-on-year, was mainly due to higher demand in the business and household segments, both of which expanded 13.8% year-on-year.

“Stronger growth in the construction sector that expanded 16.3% in September from 13.6% in August and the purchase of fixed assets other than land and building, which grew to 4.2% in September from 2% in August, have boosted business loans growth.

“Firmer growth in the household segment was due to strong demand in the purchase of residential property and personal use,” it said in a report.

OSK Research said total deposits grew by 12.6% in September mainly due to higher deposit placements by statutory authorities and business enterprises.

It said asset quality was still looking good, with net impaired loans stood at 2%, further supporting the research house's view that asset quality was largely intact.

OSK Research also placed a “neutral” call on the banking sector.