RAM Ratings: Interest waiver to hit banks’ earnings recovery

Yong Yin Ching, RAM’s co-head of Financial Institution Ratings said: “While those with a greater loan exposure to the lower income group will be more severely affected, this is unlikely to be a threat to banks’ capitalisation on the whole."

KUALA LUMPUR: RAM Ratings expects the three-month interest waiver proposed by the Ministry of Finance (MOF) recently for loan moratorium recipients under the Pemulih relief programme will impinge on banks’ earnings recovery this year.

It said on Friday the move will apply to individual borrowers in the bottom 50% (B50) income bracket.