CGS International Research said it believes the benign loan-loss provisioning would have helped banks achieve 5% to 6% net profit growth in 2Q24.
PETALING JAYA: The banking sector’s net profit is anticipated to grow by 5% to 6% in the second quarter of the year (2Q24) supported by net interest income from loans and non-interest income.
CGS International Research, which is retaining its “overweight” rating on banks, said it believes the benign loan loss provisioning would have helped banks achieve 5% to 6% net profit growth in 2Q24, driven by a 3% to 4% year-on-year (y-o-y) increase in net interest income and mid-single-digit growth in non-interest income, against 6% to 7% y-o-y rise in overheads.
“Another positive development in June 2024 was the pick-up in loan growth from 5.8% y-o-y in May to 6.4% y-o-y in June, with the improvement mainly coming from the business-loan segment, which grew 5.6% y-o-y at end-June versus growth of 4.8% y-o-y at end-May this year.
“This would bode well for the y-o-y expansion of banks’ net interest income in 2Q24,” the research house added.
