Kenanga Research in its report to clients was also optimistic, saying that “while economic conditions may appear pressing, well-managed financial institutions were still successful in gaining headways in balancing market prudence and profitability.
Hong Leong Investment Bank’s research unit said this in a note to clients, adding that for the year just ended, system loans growth for the industry gained traction to 3.8% on a year-on-year basis while deposits remained firm at 5%. It also expects gross impaired loan ratio to creep upwards but said it would not be overly concerned as banks had made heavy preemptive provisioning in the last financial year and it believed that credit risk had been “passably” priced in by the market.“As for sentiment on banks being potentially weighed down by the fiasco surrounding, if any, we see it as a good buying opportunity, ” it said, referring to last week’s announcement that AMMB had paid RM2.
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