Battle for deposits forecast to intensify

RHB Research said that with digital banks poised to launch operations in the months ahead, it will be interesting to note how conventional banks react to the attractive deposit rates these new entities are expected to offer.

PETALING JAYA: As competition for deposits intensifies in the months ahead, one research house has bucked the trend by downgrading its outlook on the banking sector. It believes that competition for deposits could intensify towards year-end although pressure on net interest margins (NIMs) and operating expenditure may abate.

RHB Research commented that overall, banks have recorded decent second-quarter (2Q23) results, but they may not see a repeat of the hefty income in the first half of the year (1H23) from treasury and markets.