Posted: 08 Jul 2014 04:42 PM PDT

KUCHING: A possible hike in the Overnight Policy Rate (OPR) will provide short-term benefits for banks as lending rates can re-price immediately, but competition will continue to pressure net interest margin (NIM).

"An interest hike will be positive for most banks as the variable rate and base lending rates-based loans tend to be re-priced within a week of a hike, while deposit rates take longer to adjust, due to various maturity profiles," said analysts at AllianceDBS Research Sdn Bhd (AllianceDBS Research) added in a note yesterday.

The research firm anticipates Bank Negara Malaysia to raise the OPR by 25 basis points (bps) to 3.25 per cent at its upcoming Monetary Policy Committee meeting on Thursday.

The last time Bank Negara raised the OPR was in May 2011, AllianceDBS Research said.

When Bank Negara raised the OPR by a total of 75 bps (25 bps over three rounds) in 2010, there was an uptick in NIM but the expansion was short lived.

"Although Bank Negara kept the policy rate unchanged thereafter, NIM slipped due to persistent competition for deposits and loans.

"In our view, NIM compression will continue to persist in 2014 but we expect that to ease from a year ago with more rational pricing ahead."

Customer affordability and ability to service higher interest costs need to be monitored when interest rates rise, the firm added, as this could lead to higher non-performing loans (NPL) and provisions in the books.

The OPR hike in 2010 was substantial (a total of 75 bps in one year) and triggered an uptick in NPL, and provisions or credit costs rose in tandem.

A larger hike could create risks of higher NPL and provisions. Nevertheless, AllianceDBS Research said the banking system's loan loss coverage ratio remains robust at close to 100 per cent and should buffer an NPL uptick.

As economic conditions in the external environment are improving and inflation is expected to remain high, a tighter monetary policy will be on the cards.

The research house further added that banks are expected to benefit following an interest rate hike, provided there is no uptick in asset quality.

"Based on our sensitivity analysis, every 10bps hike in net interest margin (NIM) would raise sector earnings by circa six per cent.

"In general, banks with a larger share of variable rate loans and strong current account savings

Three RTCs for Sabah and Sarawak — Nanta – BorneoPost Online ...

Posted: 01 Jul 2014 12:35 PM PDT

KUALA LUMPUR: The Rural and Regional Development Ministry will set up three rural transformation centres (RTCs) in Sabah and Sarawak soon.

Its deputy minister Datuk Alexander Nanta Linggi said two of the RTCs would be built in Sabah, the first time for the state.

The other would be built in Sarawak, the second for the state after the first RTC in Miri, the building of which started in June and expected to be ready this September, he said in reply to a question from Senator Datuk Lihan Jok in the Dewan Negara yesterday.

"Basically, the government only allows the setting up of one RTC in each state, but since Sabah and Sarawak are big states, there will be two RTCs in each of these two states."

Nanta said his ministry was waiting for a proposal from the Sarawak Rural Development Ministry on a suitable site for the state's second RTC.

He said the RTC would provide various facilities including National Registration Department and Social Welfare Department counters, FAMA office, a dental clinic and business lots for local traders.

Nanta said seven Mini RTCs were currently operating in Sarawak, namely in Kuching, Bau, Miri, Sri Aman and Sibu. — Bernama

Sabahans fed up over kidnappings – Ghapur – BorneoPost Online ...

Posted: 06 May 2014 09:34 AM PDT

KOTA KINABALU: Kalabakan member of parliament Datuk Ghapur Salleh said Sabahans are "getting fed up" with the recent spate of kidnappings in Sabah.

He said Sabahans are now scared for their own safety due to the kidnappings, the latest involving a fish farm manager from China in the east coast on Tuesday.

"Many agents don't have business now because tourists from China don't want to come here anymore.

"Sabahans are fed up with all the promises of the federal government. We have been part of Malaysia for 51 years now but the government doesn't even think of our safety," he said.

Ghapur was commenting on the kidnapping of Yang Zai Lin of Guangzhou who was taken from the Wonderful Terrace Fish Farm on Pulau Baik at about 2.45am Tuesday by five gunmen believed to be from southern Philippines.

Eastern Sabah Security Command (ESSCom) personnel, including air and sea units, had pursued the abductors who opened fire and escaped to the islands in southern Philippines.

On April 3, Shanghai tourist Gao Huayun, 29, and Filipino resort worker Marcy Dayawan, 40, were kidnapped by gunmen from Singamata Reef Resort off Semporna.

Ghapur said ESSCom should be dismantled and the National Security Council (MKN) take over the security aspects of the area.

"ESSCom is a toothless tiger. They have no command of the police or the army. It is better to get someone who has power," he said.

ESSCom was formed following the invasion of Sulu gunmen last year. It covers 1,400km of the eastern coast of Sabah from Kudat to Tawau.

Penampang member of parliament Darell Leiking called for an "all-out war" against the "terrorists" following the latest kidnapping.

"We have been made to look like fools and weaklings. They come into the country with weapons and army fatigues and they wreak chaos, havoc and fear. They are not mere kidnappers, but terrorists.

"Enough is enough. We shouldn't show them any kindness. They should be shot on sight," he said

Leiking said there were serious concerns since the government had spent millions of ringgit to establish ESSCom.

In the 2014 Budget tabled last year, ESSCom was allocated an RM75 million to boost security along Sabah's east coast.

"ESSCom has to give a full explanation on how these terrorists managed to slip past them. These incidents are a slap to ESSCom, the government and the people of Sabah," he said.

Leiking said the "terrorists" would have very likely received help and intelligence from people holding Malaysian documentation in Sabah.

He added that the full report on the Royal Commission of Inquiry (RCI) on illegal immigrants in Sabah should be released immediately because of public interest.

The report is due to be presented to the Agong on May 21.

Hike to benefit banks, but competition will affect nNimM ... Berita Sabah - News 2 Sabah

Hike to benefit banks, but competition will affect nNimM <b>...</b> Berita Sabah - News 2 Sabah

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