Expected rate hike seen having limited impact on banks

RAM Ratings co-head of financial institution ratings Wong Yin Ching told StarBiz the anticipated increase in the OPR by 25 bps would provide some respite to banks

PETALING JAYA: The anticipated hike in overnight policy rate (OPR) by at least 25 basis points (bps) this year would ease margin compression of banks, but the pressure to remain competitive may limit its impact on their bottomline, analysts said.

RAM Ratings co-head of financial institution ratings Wong Yin Ching said the anticipated increase in the OPR by 25 bps would provide some respite to banks’ narrowing net interest margins (NIMs) although it may not be sufficient to arrest the declining trend given the quantum and timing of the rate hike.