Base rate raise by banks to relieve margin pressures, says Maybank IB

The race for deposits comes after CIMB Group Bhd, the second largest lender, fixed its fixed deposit rates at 3.4% for a 12-month tenure two weeks ago from 3.15% previously. Analysts described the rate set by CIMB as aggressive and could trigger another round of competition for low cost funds.

KUALA LUMPUR : The move by Public Bank Bhd and Hong Leong Bank Bhd to raise their base rates (BR) is a positive move in alleviating some of the pressure on their net interest margins (NIM) amid an environment of declining interbank rates, said Maybank IB Research.