PETALING JAYA: The profitability of banks in Malaysia will be negatively affected in the short term following the recent cut in the overnight policy rate (OPR), with banks with higher floating rate loans being impacted the most.
MIDF Research, which is cautiously optimistic on the banking sector’s outlook, said that banks would be hit by short-term pressure on their net interest margins (NIM). However, the impact on earnings is expected to be insignificant.
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