{
  "id": 6061097,
  "title": "Continued net interest margins compression a risk to lending environment",
  "url": "https://urgent.news/2026/09/06/continued-net-interest-margins-compression-a-risk-to-lending",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-06T23:10:46.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/corporate/2026/09/1527214/continued-net-interest-margins-compression-risk-lending"
  },
  "original_language": "en",
  "account": "The recent corporate earnings of banking sector firms reveal a continuous compression of net interest margins (NIM), as the cost of funds rises due to increased competition for deposits, according to a report by Tradeview Capital fund manager Neoh Jia Man. This trend could negatively impact borrowers, leading to higher financing costs and potentially stifling economic growth. Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, noted that banks must maintain their liquidity position, including liquidity coverage ratio and net stable funding ratio, which further intensifies deposit competition, especially when depositors require higher rates to attract customers. Hong Leong Investment Bank (HLIB) Research observed a narrowing of sector margins by two basis points (bps) quarter-on-quarter and three bps year-on-year. Affin Bank Bhd had the lowest NIM at 1.5 percent, followed by RHB Bank Bhd at 1.8 percent. While some banks manage their cost of funds effectively, others face challenges. MBSB Research expects deposit competition to remain tight, given the high demand for loans. However, the outlook for NIM is considered more positive in the long term, provided banks accumulate higher-yielding loans. During the second quarter, banks with higher NIM outperformed, with Alliance Bank Malaysia Bhd reporting a 25 percent earnings increase to RM248.32 million, despite a modest revenue growth of 2.5 percent to RM630.93 million.",
  "summary": "KUALA LUMPUR: The recent corporate earnings of the banking sector shows continuous net interest margins (NIM) squeeze, as the cost of funds increases as banks compete for deposits – a trend that could take off some of the shine of relatively good results.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}