I am not too keen on the banking sector especially with the rising interest rates. With the high cost of living and high inflation rates, an increase in interest rates would result in more defaults.
Could the lukewarm response be due to what the market is seeing for the latest numbers? Looking at MBSB's Q1 2023 analyst report, their impaired financing has risen to 6.98%. Profit before tax is down to RM84 million and Financing Loss Coverage seems to have dropped to 57% from over 100% 2 years ago. Have they been reversing provisions to boosts profits in past quarters? Does this make sense when impaired financing is rising (4.6% 2 years ago to 6.98% now).