BANKING SECTOR TO GROW STRONGER IN THE SECOND HALF OF YEAR, SAYS AMRESEARCH

KUALA LUMPUR, June 2 (Bernama) -- The banking sector is expected to grow
stronger in the second half of this year, on the back of strong loans growth in
the corporate and consumer segment, said AmResearch.

The research house in a research note said Thursday it expects a continuous
pick up in corporate loans in the second half of the year with the rollout of
the government's Economic Transformation Programme (ETP).

"So far, this is backed by evidence of good performance from the corporate
segment, in both the loan applications and approvals to date," it said.

Meanwhile, OSK Research said despite competition for lending yields and
deposits remaining, net interest income is expected to sequentially recover,
backed by the stabilising of domestic net interest margins from the recent
interest rate hike.

The net interest income is expected to further strengthen in the second
half on a possible further rate hike, it added.

This is in addition to more rational pricing in the mortgage space as
regulators continue to implement macro-prudential measures, including higher
risk weighting even for mortgage portfolios with loans to value ratio lower than
90 per cent.

At the same time, the expected flow of financing for the government’s
various ETP projects in the form of higher margin bridging loans would also be
an incremental factor, OSK said.