October banking spreads up 19bps MoM

Fresh banking spreads increased by 19bps on month-on-month basis in October 2016 to 3.50 percent due to favourable movements in both fresh deposit and lending rates. However, weighted average banking spreads clocked in 31bps on year-on-year basis lower in October 2016 as lending rates declined by 79bps to 8.17 percent while deposit rates slipped by just 48bps to 3.14 percent.
On month-on-month basis, weighted average banking spreads inched-up by 2bps with lending rates edging up by 5bps whereas deposit rates witnessed an uptick of 3bps. "We believe uptick in recent cut-off yields in the T-bills auction indicates the end of monetary easing by the central bank," Amreen Soorani, an analyst at JS Global Capital said.