Banks enjoyed faster loan growth, higher margins and lower provisions in the first half of the year as the economy further reopens, said stockbroker Colfinancial.com.
Banks’ median net income growth reached 33.4 percent, it said.
Net interest income of most banks the stockbroker monitors increased as demand for loans picked up and as margins improved.
Banks’ median loan growth accelerated to 10.2 percent as of end-June from 7 percent in end-March and 4.9 percent as of end-December.
“Net interest margins also improved for all banks during the second quarter, brought about by higher interest rates,” it said.
Colfinancial.com said banks’ net interest margin will continue to improve, supported by improving loan volumes and policy rate hikes.
“Meanwhile, we expect funding cost to remain low as deposit rates tend to be sticky in the near-term and liquidity in the system remains high,” it said.
Banks’ provision for soured loans for the period dropped by a median rate of 45.6 percent, with median annualized credit cost falling to 63 basis points (bps) from 135 bps last year.
“As of end June, non-performing loan (NPL) ratio of all banks improved quarter-on-quarter, while the sector’s median NPL cover increased to 100.2 percent as of end-June from 94.5 percent as of end-March,” Colfinancial.com said.