Hong Leong Bank, Public Bank among top gainers after Malaysia rate hike

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KUALA LUMPUR (Jan 29): Hong Leong Bank Bhd and Public Bank Bhd rose among Bursa Malaysia's top gainers today, after analysts said both financial service providers were seen among main beneficiaries of Malaysia's interest rate hike.

On Thursday (Jan 25), Bank Negara Malaysia hiked the overnight policy rate by 25 basis points to 3.25%. Today, Hong Leong Bank rose 30 sen to settle at RM18.50 at 12:30pm, while Public Bank climbed 26 sen to RM21.56.

Hong Leong Bank and Public Bank were Bursa Malaysia's fourth and fifth-largest gainers, respectively.

In a note on Friday, Affin Hwang Investment Bank Bhd said Hong Leong Bank and Public Bank were among "clear-cut winners" of Malaysia's interest rate hike, due to the banks' high variable rate loan portfolio and after considering both group's current and savings account (CASA) ratio.

The "clear-cut winners" include Alliance Bank Bhd, RHB Bank Bhd and Malayan Banking Bhd (Maybank), according to Affin Hwang.

Affin Hwang said: “The clear-cut winners are Alliance Bank (which has 90% variable rate loans in its portfolio; 35.3% CASA ratio and is entirely domestic-centric), RHB (82.5% variable rate loan portfolio; 27% CASA ratio), Maybank (71% variable rate loan portfolio; 35% CASA ratio), Public Bank (76.9% variable rate loan portfolio; 25.5% CASA ratio) and Hong Leong Bank (76.5% variable rate loan portfolio; 26.8% CASA ratio)."