PETALING JAYA: With Bank Negara raising its interest rate sooner than expected, it is a positive surprise for banks that were previously affected by margin compression.
Analysts forecast an improvement in net interest margin (NIM) of banks, albeit at varying degrees, following the increase in the overnight policy rate (OPR) from 1.75% to 2%.
Shareholders of banking stocks are also in for a treat, as dividend payout may likely increase on the back of improved earnings.
NIM is a measure of profitability for banks and refers to the difference between interest received and interest paid out by the banks.
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