KUALA LUMPUR: AmResearch is maintaining its Overweight rating on the banking sector and its buys are CIMB, HLBB, Maybank, MBSB and RHB Cap.
It said on Thursday, March 31 that CIMB Bank Bhd and CIMB Islamic Bank Bhd have announced an increase in their base lending rate (BLR) and base financing rate (BFR) by five basis points from 6.3% to 6.35%, effective from April 4.
The change in the rates followed Bank Negara's decision to increase the statutory reserve ratio requirement from 1% to 2% with effect from Friday, April 1.
'This is a surprise to us as we had not expected an increase in BLR so soon following hints from the central bank last week that there will likely be a longer time-lag impact before regulators consider banks' applications to raise BLR. The increase in BLR by 5bps is positive for CIMB. This is because opportunity costs benchmark is estimated to increase simplistically by only 3bps, based on our estimates.
'We expect other banks to follow suit.'' The increase is not yet factored into our forecasts. We will review our forecasts later. In addition, we believe there could now be a possibility of further SRR ratio increases ahead,' it said.
It said on Thursday, March 31 that CIMB Bank Bhd and CIMB Islamic Bank Bhd have announced an increase in their base lending rate (BLR) and base financing rate (BFR) by five basis points from 6.3% to 6.35%, effective from April 4.
The change in the rates followed Bank Negara's decision to increase the statutory reserve ratio requirement from 1% to 2% with effect from Friday, April 1.
'This is a surprise to us as we had not expected an increase in BLR so soon following hints from the central bank last week that there will likely be a longer time-lag impact before regulators consider banks' applications to raise BLR. The increase in BLR by 5bps is positive for CIMB. This is because opportunity costs benchmark is estimated to increase simplistically by only 3bps, based on our estimates.
'We expect other banks to follow suit.'' The increase is not yet factored into our forecasts. We will review our forecasts later. In addition, we believe there could now be a possibility of further SRR ratio increases ahead,' it said.
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