Nora: Uncertainties loom over the global banking industry
KUALA LUMPUR: Global developments over the year have given the banking sector inconsistent indicators and these uncertainties will continue to take over the banking industry this year.
Malayan Commercial Banks’ Association (MCBA) president Nora Abd Manaf said there is not much chance of predictability.
However, she said the global banking system is not only bigger and more profitable but also resilient than at any time in the past 10 years.
She added that banks in the United States are ahead on multiple measures as compared with their European counterparts.
“Favourable gross domestic product (GDP) growth, tax cuts and rising rates have further boosted the state of the industry. However, many European banks have become smaller, withdrawing from the international market and exiting former profitable businesses,” said Nora.
In the Asia-Pacific, she said the Chinese banking industry has surpassed that of the European Union in terms of size and is doing well in terms of profitability.
“Larger banks reported a 5.3% return on equity in 2017. However, the concerns over economic growth and the US-China tariff war are affecting prospects.
“Japanese banks, on the other hand, escaped the financial crisis and have long suffered the effects of slow domestic growth and low negative interest rates.
“Much remains to be seen this year and uncertainties loom on the horizon,” she said, adding that real GDP growth forecasts by the International Monetary Fund points to a deceleration in all regions, including China and emerging Asia.
Nora, who is also the Malayan Banking Bhd group chief human capital officer, said this in her speech yesterday before the signing of the 19th collective agreement (CA) between MCBA and the National Union of Bank Employees (NUBE).
The new CA for the period January 2018 to December 2020 will see a revision in salary of 10% for clerical staff and 12% for non-clerical staff, benefitting around 20,000 employees in 20 MCBA member banks in the peninsula.
The starting salary for the different employee groups will also be increased by 12% to 16%, with the maximum salary raised by 16%.
The arrears in salary for the whole of last year is expected to be banked in to staff for most banks by the end of this month.
Nora: Concerns over economic growth and the US-China tariff war are affecting prospects.