CGS-CIMB has reaffirmed its overweight call on the banking sector, underpinned by the improved outlook for net interest income and a projected 23.4% drop in loan loss provisioning in 2021, which in turn will translate to better profitability for earnings.
PETALING JAYA: Bank Negara’s decision to keep the overnight policy rate (OPR) unchanged at 1.75% is positive for banks.
It would provide a reprieve for banks’ net interest margin (NIM) – a measure of the difference between interest paid and interest received. Banks are already facing pressure on the bottomline from the 125-basis-point (bps) cut seen this year and the modification loss following the six-month loan moratorium that ended in September.
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