No deterioration in debt servicing ability
? We gathered from the 2H21 FSR report that the median debt service ratio for outstanding household loans was stable at 35% at end-Jun 21 and Dec 21.
? BNM expects new credit cost to be more modest in 2022F, supporting our expectation for a 16% drop in 2022F loan loss provisioning (LLP).
? Reiterate Overweight on banks given our expected reduction in LLP and expansion in net interest margin (post-OPR hike in 2H22F).