Recovery in 2021 can counter gloom in banking

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A possible spike in banks’ bad loans in the first half of 2021 is keeping investors sceptical on banking stocks.

“We sensed that the main reason why investors have not increased their holdings in banks is their concern over a possible rise in gross impaired loan ratio in the first half of 2021 following the end of the targeted loan moratorium," CGS-CIMB Research said.

“We sensed that the main reason why investors have not increased their holdings in banks is their concern over a possible rise in gross impaired loan ratio in the first half of 2021 following the end of the targeted loan moratorium. The research house added that investors were also concerned about banks’ exposure to the aviation sector, which has been badly affected by travel restrictions following the Covid-19 outbreak.

 

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