Galaxy International: Despite the risks in the Middle East, the Malaysian banking industry will continue to maintain positive profit growth.

Analyst Winson Ng from China Galaxy International stated in a report that despite the tension in the Middle East, the Malaysian banking sector is expected to maintain a positive path of profit growth. Potential interest rate cuts and rising credit costs will only have limited indirect effects. He pointed out that high oil prices may prompt the Malaysian central bank to lower its policy rate, and the central bank may closely monitor the market before addressing the impact of oil prices. He believes that a 25 basis point rate cut could lead to a 1.6% decrease in net profits for the industry, and an increase in oil prices could result in an increase in non-performing loans. However, he added that strong preventive provisions may be enough to mitigate potential growth in non-performing loans. China Galaxy International maintains a positive rating on the Malaysian banking sector, stating that its profits are largely able to withstand any negative effects of rising oil prices. The firm lists AMMB, Maybank, and RHB Bank as preferred stocks.