Major banking counters slip after AmBank group CEO said worried over outlook in 2017

Major banking counters slip after AmBank group CEO said worried over outlook in 2017
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KUALA LUMPUR (Dec 15): Shares in most major banking counters fell in early trade today, after AMMB Holdings Bhd (AmBank Group) group chief executive officer Datuk Sulaiman Mohd Tahir yesterday said he is "worried" about the outlook of the banking industry in 2017 and expects improvement only in the second half of next year.

At 10.23am, shares in AmBank Group fell two sen or 0.45% to RM4.43 for a market capitalisation of RM13.32 billion.

"We initially thought we could see some reversal in the first half, but the uncertainty persisted.

"You can have a bit more stability if people are very clear on the outcome," he said, attributing the unclear market direction to events like Brexit and the US presidential election.

"Hopefully in the second half, people are in a better position to invest. We hope to see some pickup maybe in the second half of next year," he said, adding that the group is still optimistic about its loan growth next year, supported by mega infrastructure developments by the Malaysian government such as the KL-Singapore High Speed Rail (HSR).

Given that the banking industry outlook in 2017 is still opaque, the majority of the banking counters retreated. At 10.25am CIMB Group Holdings Bhd saw it shares fall three sen or 0.65% to RM4.62 and Malayan Banking Bhd shares dipped five sen or 0.63% to RM7.90. Shares in Public Bank Bhd also dropped four sen or 0.2% to RM19.64 and RHB Bank Bhd dived seven sen or 1.45% to RM4.77.

Meanwhile, AmBank Group expects its loan growth to increase 4% to 5% for its financial year ending March 31, 2017 (FY17) compared to 2% the previous year despite the slow economic environment.