Yvonne asked 4 months ago
Hi Victor You mentioned in one of the videos on the section on Malaysia Banks that their NIM is on down trend because of Basel 3 capital requirements. Can you please expand on this?
1 Answers
Victor Chng Staff answered 4 months ago
Hi Yvonne, 

The NIM declining trend is not only exclusive to Malaysian banks; Singapore banks experience the same thing, too.

The decline, as mentioned above, is partly due to the Basel requirement and also the low-interest rate environment, especially after 2008, when banks were required to keep more capital to buffer unforeseen circumstances. Due to higher capital requirements for buffer, the banks got less capital to loan out, which reflects the fall in NIM.