Malaysian banks’ solid performance to continue in 2018: Moody’s

13 March, 2018 12:00 AM printer

KUALA LUMPUR: Moody's Investors Service said Monday that its six rated Malaysian banks that showed a solid performance last year, may see additional improvement in some areas this year.

Moody's vice president and senior analyst Simon Chen said in a statement that the asset quality and profitability of the six banks generally improved in 2017, while their capitalization and funding remained adequate, reports Xinhua.

"We expect loan demand to recover further in 2018, strengthening profitability, but also tightening funding conditions," he said, adding that profit growth among banks with weaker deposit franchises could be limited by higher funding costs.

The six banks are Malayan Banking Bhd, CIMB Group, Public Bank, RHB Bank, Hong Leong Bank and AmBank Malaysia, according to the statement.

Moody's also noted that asset quality will benefit from stronger macroeconomic conditions in 2018, both domestically and regionally, while those banks with exposure to the oil and gas sector should see their asset quality stabilize on stronger oil prices.

According to Moody's, most banks posted improved profitability in 2017, driven by steady revenue growth, stable net interest margins and a moderation in credit costs.