In recent weeks, we have started seeing banks being vilified by politicians and on social media. Even in spite of a large drop in their second quarter earnings, there are people who say they are still making profits, and should therefore do more, such as to extend the moratorium across the board.
First, banks have a duty to depositors. If borrowers do not repay their loans, how are banks able to honour deposit withdrawals? Just like any other business, banks need cash flow and liquidity. Yes, even if individuals do not own any bank stocks, all Malaysians are indirect shareholders of banks. If banks do not generate profits and declare dividends, how can these funds sustain the high returns which we all expect and enjoy each year?
Fourth, banks are like public utilities, providing useful and critical services to the economy. You need not like them, and oftentimes, many would rather not have to deal with them. But when they do not function as they should, the economy suffers.
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Source: fmtoday - 🏆 5. / 72 Read more »