Equity Analysis /

MY : Banks - No deterioration in debt servicing ability

    Winson Ng
    Winson Ng

    Financial Services Analyst

    30 March 2022
    Published by

    We gathered from the 2H21 FSR report that the median debt service ratio for outstanding household loans was stable at 35% at end-Jun 21 and Dec 21. BNM expects new credit cost to be more modest in 2022F, supporting our expectation for a 16% drop in 2022F loan loss provisioning (LLP). Reiterate Overweight on banks given our expected reduction in LLP and expansion in net interest margin (post-OPR hike in 2H22F).