The slowdown in hire purchase (HP) loan growth is expected to be temporary
HwangDBS Vickers Research Sdn Bhd said the slowdown in hire purchase (HP) loan growth is expected to be temporary. the turnaround time would return to normal once car dealers and banks refine their processes, HwangDBS said In a research note today. due to the disruption to car parts supply after the Japanese tsunami, most banks were expected to report slower HP loan growth in the second quarter. The tsunami consequently had a chain effect on car output regionally and locally as well as the amendments of the Hire Purchase Act (HPA).
The amendments of HPA that became effective June 15, 2011 had slowed HP processes and car registrations. Public Bank, Affin Holdings , AMMB Holdings, and the merged Hong Leong Bank-EON Capital, with more than 20 per cent of their total loans in car segment, would be affected, The research house said. It said “However, the negative impact should be temporary.”
HwangDBS forecast total industry volume to improve in the second half as car parts supply normalised.HP loans growth moderated in most banks’ quarterly results.It said “We estimate total TIV for this year at 611,200 units against 605,156 units last year, implying marginal one per cent year-on-year growth.”