Malaysian banks are looking at cutting costs due to the challenging economic environment, according to AllianceDBS Research, which has noted a flurry of rationalisation programs, such as CIMB Group's investment bank rationalisation end-November, which has been followed by RHB Capital and Affin Holdings. It added that "loan growth has surprisingly been holding up well but competitive pressures and re-pricing of loans coupled with weak deposit growth and aggressive deposit campaigns to shore up liquidity has further exerted pressure to earnings. The rising loan-to-deposit ratio is another indicator to watch".
Malaysian banks are looking at cutting costs due to the challenging economic environment, according to AllianceDBS Research, which has noted a flurry of rationalisation programs, such as CIMB Group's investment bank rationalisation earlier this year, which has been followed by RHB Capital and Affin Holdings. It added that "loan growth has surprisingly been holding up well but competitive pressures and re-pricing of loans coupled with weak deposit growth and aggressive deposit campaigns to shore up liquidity has further exerted pressure to earnings. The rising loan-to-deposit ratio is another indicator to watch".