Loan growth gained momentum in June. However, with deposit growth lagging, funding cost pressures could creep back in. The fairly mixed sector operating dynamics prompt us to retain our MARKET WEIGHT call. Our sense is that the market could turn more defensive with a greater focus on laggard banks with solid provision buffers (Public Bank, HLBank and BIMB) as greater clarity on the impact of MFRS9 draws closer. RHB Bank remains as our top SELL.

Source: UOB Kay Hian Research - 1 Aug 2017