According to Rakuten Trade’s head of research Kenny Yee, the banks will also see an expansion in net interest margins (NIMs) in the longer term. “Usually in the bigger picture, the margins on loans will be more than deposit rates,” Yee said.新闻电报群（www.tel8.vip）是一个Telegram群组分享平台。新闻电报群包括新闻电报群、Telegram群组索引、Telegram群组导航、新加坡Telegram群组、Telegram中文群组、Telegram群组（其他）、Telegram 美国 群组、Telegram群组爬虫、电报群 科学上网、小飞机 怎么 加 群、tg群等内容。新闻电报群为广大电报用户提供各种电报群组/电报频道/电报机器人导航服务。
KUALA LUMPUR: The banking sector is one of the short-term beneficiaries from Bank Negara’s move to normalise the overnight policy rate (OPR) by 25 basis points (bps) higher to 2.25%.
When contacted by StarBiz, analysts opined that banks are well poised to gain from the interest rate differential between loans and deposits, although this would neutralise when all loans and deposits portfolios are adjusted.
According to Rakuten Trade’s head of research Kenny Yee, the banks will also see an expansion in net interest margins (NIMs) in the longer term.
“Usually in the bigger picture, the margins on loans will be more than deposit rates,” Yee said.
He noted that there were some market concerns that the OPR hike would be detrimental to loan growth, although this may be temporary since the increase is at a manageable quantum and interest rates are on an upward normalising trend from a low base.,
In line with the global cut in interest rates around, the OPR in Malaysia had been reduced to a record-low level of 1.75% when the Covid-19 pandemic struck two years ago.
Bank Negara had reduced the OPR five times and lowered rates by a cumulative 125 bps during the first half of 2020 to a record low of 1.75% to keep the economy moving at that time.
Bank Negara increased the OPR by 25 basis points to 2.25% on Wednesday following an increase by 25 basis points from a record low of 1.75% in May. The increase in May was the first increase in the OPR since January 2018.
“The overall risk sentiment isn’t too supportive for equity markets and this is why the bank stocks didn’t go up. Also, market consensus has priced in a rate hike to bank stocks.We think there would be at least two more hikes. It seems that the whole world is moving towards increasing interest rates now and Bank Negara has to follow suit to stem or at least slow any potential outflows,” said Rakuten Trade head of equity sales Vincent Lau.RHB Research, in its note yesterday
Banks that are listed on Bursa Malaysia saw mixed share price movements yesterday with most FBM KLCI heavyweights trending down. Malayan Banking Bhd