Asian banks are likely to see their bottom lines boosted by net interest income as they reap the benefits of rising rates.
Singapore banks, for example, are expected to port net interest margin expansions of 10 basis points on a quarter-to-quarter basis, the highest over the last eight quarters.
“We are seeing the highest pace of rate hikes in the shortest span of time in at least 20 years,” JPMorgan analyst Harsh Wardhan Modi said.
“My sense is that not only will second quarter numbers meet our expectations but guidance from managements will reaffirm much better net interest margin outlook for the second half of the year.”
United Overseas Bank, the smallest-listed Singapore lender, unveils results on Friday, followed by Oversea-Chinese Banking Corporation on August 3 and DBS a day later.
HSBC, Standard Chartered and other Asian banks are also set to report improvements.
London-listed HSBC and StanChart, both of which make the bulk of their revenue in Asia, are set to report strong underlying net interest income on rising interest rates but impairments and higher costs are likely to be a big drag on results.
- Reuters, with additional editing by George Russell
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