KUALA LUMPUR – The Association of Banks in Malaysia (ABM) today denied its members were responsible for the glut in shopping malls in the country.
It said allegations that banks were giving out loans for the development of commercial properties without due diligence were unacceptable and incorrect.
“Our member banks have in place stringent processes for credit risk assessment supported by sound lending and valuation practices.
“Banks are also certainly not the part that is responsible for the creation of the entire supply of and demand for such properties,” ABM said in a statement.
ABM was refuting a news report by Free Malaysia Today, which quoted a property expert as blaming the banking industry for giving out loans without due diligence and causing the oversupply in shopping malls in the country.
ABM said banks performed a thorough credit analysis before granting financing or loans for commercial properties.
Such checks, it said, among others included conducting project feasibility studies, marketability and competitors’ analysis, assessment of economic and market developments, as well as repayment capability to ensure the viability of the project.
ABM pointed that some of its members, in fact, practised a higher degree of risk assessment and approval level.
“Generally, these banks would not finance shopping malls unless they form part of the integrated wider financing requirement e.g. township development or high rise residential development, “it said.
– Malay Mail