Banking outlook bullish despite prosperity tax

PETALING JAYA: The Cukai Makmur or prosperity tax under Budget 2022 is expected to dampen banks’ earnings in financial year 2022 (FY22), but a possible offset could be lower-than-expected provisions with the economy improving.

Notwithstanding the one-off special tax of 33% to be imposed on companies that have a pre-tax profit of above RM100mil, analysts remain bullish on the banking sector as September banking system data continues to point towards an economic recovery.