More pressure on Malaysia's banking system

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 pressure on the banking sector is not expected to ease anytime soon, with more analysts lowering their core projected figures this year.

After witnessing moderate growth for the sector in the final quarter of last year from lower provisions, there are strong signals for further cuts in earnings and loan growth this year. Apart from a slower growth this year, the ongoing margin pressure would be a drag on most banks’ bottom lines and loan growth.