Malaysian banks in Indonesia to gain from BI rate cut

PETALING JAYA: The interest rate cut by Bank Indonesia (BI) last week and further anticipated rate cuts in that country could be a game changer for Malaysian banks in Indonesia as they could see an uplift in their loan growth and earnings amid a challenging economic environment following weaker commodity prices and slower economic growth.

Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd’s units had been bogged down by provisions due to pressure on their asset quality but this scenario is set to change amid signs of further rate cuts by the Indonesian central bank.