Something weird is going on at Malaysia’s banks.

The problem is about deposits, or more precisely, a lack of them.

As CIMB Group Holdings Bhd. analyst Winson Ng notes, the banking industry’s loans-to-deposit ratio has gone from 76 percent in February 2012 to 90 percent in June.

For Malayan Banking Bhd., or Maybank, the ratio is approaching 101 percent, a level last briefly seen in 2006, according to data compiled by Bloomberg.

Maybank may be the canary in the coalmine.

The largest Malaysian lender controls 26 percent of the $411 billion the country’s publicly traded financial institutions have in deposits.

For almost three decades, Maybank’s loans and deposits have both grown at a compounded annual rate of 13 percent.

In the past five years, however, deposit growth has slowed to 9 percent, while loans are still expanding at 11 percent. That gap of 2 percentage points is pushing up funding costs.

Large Malaysian banks — Maybank, Public Bank Bhd., CIMB and Hong Leong Bank Bhd. — are now earning a net interest spread of less than 2 percent, which puts them in the ranks of emerging Asia’s least profitable lenders.

With deposits getting squeezed, listed Malaysian banks and their subsidiaries have raised $6.4 billion from fixed-income markets this year, the most since 2014. Less than half of it is in ringgit, though. – The Star

Mandalika, Palu zones to start operations

As part of the efforts to accelerate economic growth in eastern Indonesia, the government is gearing up to launch two special economic zones (KEK), one in Mandalika, West Nusa Tenggara, and the other in Palu, Central Sulawesi.

“We recommend the launch of operation of the two special economic zones in late August or in September by President Joko “Jokowi” Widodo,” said Coordinating Economic Minister Darmin Nasution after attending a meeting of the National Council for Special Economic Zones in Jakarta on Wednesday.

Three hotels – Pullman Hotel, Royal Tulip Hotel and X2 Hotel – are being constructed in the KEK Mandalika, which focuses on the tourism industry, in Lombok Tengah regency. Construction on three more hotels, ClubMed Hotel, Paramount Hotel and Mozaique Jiva One Sky Hotel, is to begin next year.

The construction of infrastructure will cost 2.2 trillion rupiah (US$164.84 billion) by 2025, while the potential investment from the private companies is Rp 28.64 trillion. – The Jakarta Post

1MDB paid RM1. 5 bn towards debt to IPIC

1Malaysia Development Bhd said on Thursday that it has paid US$350 million (Bt11.6 billion) of its debt to Abu Dhabi’s International Petroleum Investment Co PJSC, or IPIC.

In a statement, 1MDB said the payment was pursuant to the amendment dated as of Tuesday to the settlement deed with Minister of Finance (Incorporated) Malaysia and IPIC.

“1MDB has now remitted, to date, the equivalent of $350 million to IPIC. The balance of the original July 31, 2017 payment obligation to IPIC is accordingly now due on August 31, 2017,” it said.

1MDB said all funds paid to IPIC are from proceeds of the ongoing rationalisation programme.

On Tuesday, IPIC had agreed to grant MoF Inc and 1MDB an extension until the end of this month to meet their payment obligations if a payment of at least $310 million was made by August 12. – The Star

Phnom Penh’s Golden Sorya Mall to get fresh start

Golden Sorya Mall (GSM), the semi-open air plaza on Street 51 in Phnom Penh, best known for its seedy nightlife, will be undergoing an extensive renovation to make it “more commercially viable”, one of its investors said yesterday, refuting rumours that the near-empty venue faced imminent closure. GSM, which opened in 2009, once operated at near-full capacity – with more than 100 shops and stalls leased to salons, arcades, minimarts, restaurants and bars. – The Phnom Penh Post