“We are projecting a recovery in banks’ core net profit growth to 6% in 2021 versus an estimated 10.8% slide in 2020, which would be driven by two earnings catalysts, ” CGS-CIMB Research said in its latest report.
PETALING JAYA: After three consecutive quarters of aggressive provisioning by banks to beef up their buffer against potential bad loans following the Covid-19 pandemic, banks may not need to bulk up like before.
With a more favourable operating environment now, CGS-CIMB Research believes that banks are at a turning point for a loan loss provision (LLP) downcycle from the first quarter of 2021 (Q1’21), which in turn should improve their profitability.
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