Equity Analysis /

MY : Banks - Signs of moderation in loan growth

    Winson Ng
    Winson Ng

    Financial Services Analyst

    1 April 2021
    Published byCGS-CIMB

    Notwithstanding the expected weaker loan growth, we continue to project a recovery in NII growth for banks in 2021 due to better net interest margins. Banks’ total provision only rose by RM600m in 2M21 vs. RM3.73bn in 4Q20, supporting our expectation for lower LLP in 1Q21 (vs. the level in 4Q20). We reiterate our Overweight call on banks, underpinned by the expected decline in LLP and turnaround in NII growth in 2021F.