KUALA LUMPUR – The banks in Malaysia’s banking industry are taking proactive steps towards combating climate change and are aware of the required adjustments that are needed to implement and encourage sustainable practices.
Kenanga Investment Bank Bhd explained that the implementation of sustainable or green financing is becoming more common, and that financial institutions are playing their part to take charge and become major accelerators for Malaysia’s economic growth.
In a statement, it stated that banks are at the forefront of supporting and speeding the transition of their customers to more sustainable operating standards and lifestyles.
“For this reason, on April 30, 2021, Bank Negara Malaysia released its Climate Change and Principle-based Taxonomy discussion paper to assist financial institutions on several components which might make their evaluations more complete,” it added.
The document outlined both the criteria for risk assessment and the corrective steps that might be put into place in order to facilitate a smoother transition.
Kenanga stated that even if some banks may be advancing at a faster rate than others, the company does not discount the advancements made by the remaining institutions.
For the time being, it said that the growth projections of sustainable financing ought to be in sync with their overall expectations on the banking industry, capitalising on Malaysia’s economic recovery as well as the reopening of borders to support commercial activities.
Although household loans may taper off on increased interest rates, competitive offerings on retail green energy financing solutions may boost interest, it explained.
In addition to that, the research firm is maintaining its “overweight” call on the banking sector as a result of the industry’s loan growth trajectory as well as overnight policy rate-led margins improvements.
Join our Telegram group for the latest updates!
Read more: EPF savings low and concerning after COVID withdrawals
Discussion about this post