Foreign banks lose out to local rivals on earnings but they still hold advantage

After the doldrums, the sector is expected to pick up momentum in the second half of next year with a recovery in, among others, oil prices as well as a clear direction on US policies especially on its interest rates

PETALING JAYA: While locally incorporated foreign banks did not see as high earnings growth as their local counterparts in the first quarter of this year, they have some competitive advantage over most of the local boys in the areas of cross-border banking, private banking and wealth management.

TA Securities said this in a recent report prepared for clients stating that collectively, net profit reported by Standard Chartered, HSBC, OCBC Malaysia and UOB Malaysia (UOBM) contracted by 12.4% on a year-on-year basis in the first quarter of 2017 while local listed banks registered earnings growth of 14.1% over the same period.