Equity Analysis /

MY : Banks - No deterioration in debt servicing ability

    Winson Ng
    Winson Ng

    Financial Services Analyst

    30 March 2022
    Published byCGS-CIMB

    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).