Banking stay strong in dividend as long interest rate remain or hike
is no brainer that since BNM hike the rates, Banks start to earn extra money from existing loan. No need to churn more sales or activities, is like giving a formula milk to baby after breastfeeding. one thing to look for is when the interest will be cut , Banking sector will be back to normal dividend. Now , they still on steroid
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kvin108 : they earn from existing loan those interest, but as well, those FD that recently placed, they need to pay back too, this including existing FD placed, customer can always opted for latest FD rate.... just my POV... but if interest rate cut, will it be beneficial for local bank? or maintaining it will be the best way?
I also kinda confused with the calculation
mjbondOP kvin108: our FD is free money for them bro. if they give you 4%, the next loan they hand out probably 8%. they never lose out . however if your old mortgage loan after minus BLR is 3.8% , now is 5.7% !. imagine that loan is over rm100k to million ...
BSJJ mjbondOP: They will be better with lower interest. Simple thing, you like to borrow money by higher interest or lower interest?
104337105 BSJJ: I think the government want the economic work like this, low interest rate mean cheap money and loan growth for the bank. While raise the rate to curb lending activities so that bubble doesn't form since the inflation rate are high. For users, we prefer low interest rate so that we can loan without thinking much vs high interest rate which equat to higher cost. I think what mjbond trying to say is that bank having a boost in profits due to rake hike. That all
mjbondOP BSJJ: I don't know man..since the rate can't be controlled by people like us. I would say, we have no choice. if you need to buy a house now. no matter what the interest rate, you still have to take it. what is my concern is that when the rate is low, I take it because I can afford to pay, few years down the road, the interest rake higher and higher. then die lo...