KUALA LUMPUR (Jan 2): Investment analysts have maintained a positive outlook on the banking industry, with at least one increasing its earnings forecast on stronger operating income and improved credit costs.
RHB Research, which continues to hold an “overweight” stance on the sector, cited operating income to remain the primary growth driver, supported by stable loan and non-interest income growth. Credit costs are also expected to remain stable in the near term, it added.
The research firm now anticipates profit after tax and minority interest (Patmi) for FY2024 to expand by 7% year-on-year (y-o-y), up from an earlier projection of 6%, while FY2025-2026 is expected to hover around 5-6% y-o-y, driven by sustained operational efficiencies and steady revenue streams.
Similarly, Maybank Investment Bank also forecasts a 5.9% growth in aggregate operating and net profits for 2025, along with an average return on equity (ROE) of 10.5%, underpinned by stable economic momentum, resilient bank margins, and manageable credit costs.
However, analysts have cautioned that the potential rationalisation of petrol subsidies could push inflation to approximately 3% in 2025, which could curb consumer loan demand.
Despite this, Maybank forecasts an industry loan growth of approximately 5.5% in 2025, spurred by robust business loan growth indicated by recent application trends, which may offset slower consumer credit growth.
The research houses top picks with a Bloomberg “buy” call include AMMB (KL:AMBANK) and CIMB (KL:CIMB).
Analysts from Hong Leong Investment Bank noted that “system loan growth came in line with our full-year FY2024 estimate of +5.5%-6.0% year-on-year,” with analysts expecting FY2025 loan growth to mirror this year’s pace, supported by steady economic conditions.
Nevertheless, the research firm kept a “neutral” stance on the sector, citing narrowing net interest margins (NIM) in the fourth quarter of 2024 due to seasonal fixed deposit competition typically seen from October to December.
However, stable asset quality and healthy management overlays across several banks could facilitate further overlay reversals, helping mitigate NIM pressure, and support bottomline growth, said RHB.
Source: TheEdge - 3 Jan 2025
Chart | Stock Name | Last | Change | Volume |
---|
2025-02-07
AMBANK2025-02-07
AMBANK2025-02-07
CIMB2025-02-07
CIMB2025-02-07
CIMB2025-02-07
CIMB2025-02-07
CIMB2025-02-06
AMBANK2025-02-06
AMBANK2025-02-06
AMBANK2025-02-06
CIMB2025-02-05
AMBANK2025-02-05
AMBANK2025-02-05
AMBANK2025-02-05
CIMB2025-02-05
CIMB2025-02-05
CIMB2025-02-05
CIMB2025-02-05
CIMB2025-02-05
CIMB2025-02-05
CIMB2025-02-04
AMBANK2025-02-04
AMBANK2025-02-04
AMBANK2025-02-04
AMBANK2025-02-04
AMBANK2025-02-04
CIMB2025-02-04
CIMB2025-02-03
AMBANK2025-02-03
AMBANK2025-02-03
AMBANK2025-02-03
AMBANK2025-02-03
AMBANK2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-02-03
CIMB2025-01-31
AMBANK2025-01-31
AMBANK2025-01-31
AMBANK2025-01-31
CIMB2025-01-31
CIMB2025-01-31
CIMB2025-01-31
CIMB2025-01-28
AMBANK2025-01-28
AMBANK2025-01-28
AMBANK2025-01-28
CIMB2025-01-28
CIMB2025-01-28
CIMB2025-01-28
CIMB2025-01-28
CIMBCreated by edgeinvest | Feb 07, 2025
Created by edgeinvest | Feb 07, 2025
Created by edgeinvest | Feb 07, 2025
Created by edgeinvest | Feb 07, 2025
Created by edgeinvest | Feb 07, 2025
Created by edgeinvest | Feb 07, 2025