PETALING JAYA: The banking sector continues to face headwinds with the likelihood of a rise in non-performing loans, given that the recovery among economic sectors is protracted. However, while local banks will see their earnings shrink, they will be able to ride the storm post-Covid-19, said analysts.
Asset quality will be among the key metrics analysts and investors will be watching in the months ahead because the six-month automatic loan moratorium has masked the true impact of the economic downturn caused by the pandemic.