Bank Negara's new loan rules to protect loan applicants on prudent lending practices, will have a neutral impact on banks as the guidelines are not new, says HwangDBS Vickers Research.
In a research statement today, HwangDBS said it believed, banks are already practicing prudent lending, taking into consideration the necessary risk-reward of the loan.
"A testimony to this is the current retail banking non-performing loan ratios, which are now low," it said, adding, the asset quality of the segment remains manageable with retail loans comprising 53 per cent of total loans as at September 1.
Meanwhile, the research firm chose the Alliance Financial Group as its top pick due to its scalable domestic franchise and non-interest income traction, ensuring sustainable earnings and return on equity, with a target price of RM4.30 per share.
"Among large caps, we prefer Maybank at a target price RM10.60 due to its resilient transactional banking income and dividend yields.
"We continue to like Hong Leong Bank, with a target price RM16.00, for the synergies it will extract as a merged entity via improved net interest margins, and its presence in the auto and small and medium enterprises segments," it added. -- Bernama
In a research statement today, HwangDBS said it believed, banks are already practicing prudent lending, taking into consideration the necessary risk-reward of the loan.
"A testimony to this is the current retail banking non-performing loan ratios, which are now low," it said, adding, the asset quality of the segment remains manageable with retail loans comprising 53 per cent of total loans as at September 1.
Meanwhile, the research firm chose the Alliance Financial Group as its top pick due to its scalable domestic franchise and non-interest income traction, ensuring sustainable earnings and return on equity, with a target price of RM4.30 per share.
"Among large caps, we prefer Maybank at a target price RM10.60 due to its resilient transactional banking income and dividend yields.
"We continue to like Hong Leong Bank, with a target price RM16.00, for the synergies it will extract as a merged entity via improved net interest margins, and its presence in the auto and small and medium enterprises segments," it added. -- Bernama
