Slower growth in Malaysian banking sector’s core earnings seen

The 25 basis point increase in the Overnight Policy Rate (OPR) will benefit fixed deposit (FD) savers after the real rate of return on deposits will return to positive in 2018.

PETALING JAYA: The banking sector’s core earnings is anticipated to grow at a slower pace of 7.6% in 2018 compared with 10.6% in 2017 on the back of lower expectations for banks’ non-interest income, according to AmInvestment Bank Research.

The research house, which has an “overweight” rating on the banking sector, said growth for 2018 would come from an increase in revenue and improvement in operating expenses.