Downward pressure on NIM likely to ease

RHB Research expects the banking sector to post a 12% year-on-year growth to its net profit in FY23, supported by the normalisation of tax rates.

PETALING JAYA: In the midst of prevailing macroeconomic uncertainties, there are signs that the peak of net interest margin (NIM) pressure has been reached, potentially signalling a path towards recovery.

RHB Research believes that the unexpectedly steep decline in NIM between 16 and 46 basis points during the first quarter of 2023 (1Q23) could be seen as a significant event that helps alleviate concerns.