KUALA LUMPUR: MIDF Research is neutral on the banking sector as it expects net profits this year to be moderated by slower economic growth.
In a note today, MIDF said loan growth for this year was expected to be dampened and would grow at a slower rate of nine per cent.
It said exports and industrial production were expected to be affected by external environment.
"Eventhough the private sector is expected to cushion the impact from debt crisis and weaknesses of the advanced economies, overall, the growth of the domestic economy would still be impacted," it said.
MIDF said it expected the household sector loan growth to be trending lower for this year due to the new guidelines introduced by Bank Negara Malaysia on responsible financing to the retail sector.
"Judging from the key indicators, loan applications and approval slowed down in December 2011 which suggest a likelihood of a slower loan growth momentum moving into this year," it said.
It maintained its 'buy' calls on RHB Bank with a target price of RM9.20 and Alliance Financial Group Bhd at RM4.10.
Meanwhile, HwangDBS Vickers Research expected the banking sector's growth to be led by both retail and business loans.
In a note today, HwangDBS said last year's loan growth hit 13.6 per cent as per its forecast, boosted by 1.5 per cent growth in December 2011.
"Overall, loans growth grew by 12 per cent, while business loans grew by 15 per cent," it said.
HwangDBS has recommended a 'buy' call on Maybank with a target price of RM10.60 for its resilient transactional banking income and dividend yields.
It also picked Hong Leong Bank for the potential synergies as a newly-merged entity. -- BERNAMA
In a note today, MIDF said loan growth for this year was expected to be dampened and would grow at a slower rate of nine per cent.
It said exports and industrial production were expected to be affected by external environment.
"Eventhough the private sector is expected to cushion the impact from debt crisis and weaknesses of the advanced economies, overall, the growth of the domestic economy would still be impacted," it said.
MIDF said it expected the household sector loan growth to be trending lower for this year due to the new guidelines introduced by Bank Negara Malaysia on responsible financing to the retail sector.
"Judging from the key indicators, loan applications and approval slowed down in December 2011 which suggest a likelihood of a slower loan growth momentum moving into this year," it said.
It maintained its 'buy' calls on RHB Bank with a target price of RM9.20 and Alliance Financial Group Bhd at RM4.10.
Meanwhile, HwangDBS Vickers Research expected the banking sector's growth to be led by both retail and business loans.
In a note today, HwangDBS said last year's loan growth hit 13.6 per cent as per its forecast, boosted by 1.5 per cent growth in December 2011.
"Overall, loans growth grew by 12 per cent, while business loans grew by 15 per cent," it said.
HwangDBS has recommended a 'buy' call on Maybank with a target price of RM10.60 for its resilient transactional banking income and dividend yields.
It also picked Hong Leong Bank for the potential synergies as a newly-merged entity. -- BERNAMA
