Banks' non-interest income may come under pressure

PETALING JAYA: Non-interest income, which makes up between 20% and 35% of the banking system’s total income, could come under pressure this year in view of the recent surge in bond yields, which could dampen capital-raising activities and impact banks’ fee-based income.

Analysts said the US Federal Reserve’s intention to taper off its US$85bil (RM278bil) a month bond-buying programme this year or early 2014 had led to the recent spike in bond yields in emerging markets, including Malaysia, which could potentially slow fee-based or non-interest income of banks.