Banking Sector - 2024 Outlook

After enduring a year of economic slowdown and rise in non-performing loans (NPL) in 2023, we expect bank profitability to strengthen in 2024 as stronger domestic operating conditions and low interest rates drive improvements in borrower debt serviceability and asset quality. The sector's return on average assets (ROAA) will improve from wider net interest margins (NIM) and stronger loan growth and support capital generation. In addition, funding and liquid resources will remain steady as deposit growth keeps pace with credit growth and banks increase longer-term funding.