Banks' asset quality to remain stable, says Nomura

PETALING JAYA: Nomura Research, which is maintaining its neutral stance on the Malaysian banking sector, expects asset quality to remain largely stable amid an expected rise in credit costs.

“In our view, the economy is expected to register decent growth of 4%-5%, low unemployment at 3.1%, stable interest rates and a healthy current account surplus of 2.7%-3.3% over the forecast period of 2015 -2017. This is supportive of our base case view that while credit costs are expected to increase from their 2014 financial year , we do not expect them to rise beyond their long-term average,” the research house said in its latest note.