KUALA LUMPUR: CIMB Equities Research holds its Overweight approach banks because of the normal recuperation in net benefit development in FY17, undemanding valuations, and an appealing profit yield of 4.3% in 2017.
It said on Tuesday its top pick is RHB Bank.
Be that as it may, the drawback dangers for the segment are a spike in hindered credits and further decay in advance development.
CIMB Research brought up banks posted second continuous quarter of on-year net benefit development (of 3% on-year) in 4Q16 in spite of a hop in credit costs. Underperformance proportion fell for the fifth back to back quarter to 12.5% in 4Q16.
"Banks anticipate that advance development will be steady and gross disabled advance proportion to rise imperceptibly in 2017. We anticipate center net benefit development of 13.3% in 2017 (versus a drop of 3% in 2016).
Hold Overweight on expected recuperation in 2017 net benefit development," it said.
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