Potential Malaysia Rate Hike to Boost Bank Margins, Earnings in 2027 -- Market Talk

0214 GMT - Malaysia's potential 25 basis-point interest-rate hike in 1H 2027 could boost banks' net interest margins by 1.9-6.2 basis points and lift earnings by 1.3%-9.3%, Hong Leong IB analyst Raymond Ng says in a note. However, tighter liquidity and continued competition for deposits could push up funding costs, limiting the benefits over time, he says. Ng views the expected rate increase as an earnings boost rather than a catalyst for a broad sector rerating. Hong Leong maintains a neutral rating on the Malaysian banking sector. It upgrades RHB Bank to buy from hold, citing attractive yields, capital-return optionality and a favorable risk-reward profile. (yingxian.wong@wsj.com)

(END) Dow Jones Newswires

November 03, 2026 21:14 ET (02:14 GMT)