More mergers and acquisitions and loan growth seen in banking sector

PETALING JAYA: Although inherent challenges in the banking sector continue to exist post-general election (GE), industry observers and analysts on the whole are confident of encouraging loan growth and more merger and acquisition (M&A) activities this year.

Analysts are forecasting loan growth for the year to be around 7% to 10%. Moody's Investors Service, which has maintained its stable outlook for the Malaysian banking system for the next 12 to 18 months, expects a loan growth of 10%, while Alliance Research estimates it to be between 7% and 9%.