SRR hike no visible impact on banks' credit growth : OSK Research

The decision to raise the Statutory Reserve Requirement by 100 basis points to 4.00 per cent effective July 16, is unlikely to have any visible impact on the credit growth of banks, according to research.

SK Research pointed out that the move is similar to the increase in interest rates from record lows in early 2010, which did not stifle loans growth.

"Given that we expect the gross domestic product growth to remain intact at 5.6 per cent for 2011, and the current system Loan-to-Deposit Ratio of 84 % is still off the optimum 90 % to 92 % level that most banks are comfortable
with, we believe any increase in SRR, even to six per cent is unlikely to hamper loans growth," the research house said.

However, OSK Research said, the 100 basis points increase in SRR to four per cent is only expected to negatively impact the earnings of banks under its coverage by an average of 1.1%.

OSK Research maintains the "overweight" call on the banking sector and its top picks are CIMB and Maybank.

The full story is available at Bernama.

Also Read

Taiwanese banks extend more loans in August

ING disbursed $35.37b in sustainable finance in Q2

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit