- Q1 2024 system-wide credit growth was weak at 0.9%. However, we saw MoM improvement and an acceleration in credit disbursement in March. Despite weak Q1 2024 credit growth, our outlook remains positive for stronger credit growth in the remainder of 2024.

- System-wide deposit growth slightly decreased 0.8% in Q1 2024, broadly in line with credit growth. The CASA ratio increased YoY but slightly decreased QoQ to 23.7%. We maintain our expectation for improvement in the CASA ratio in the coming quarters.

- Q1 2024 aggregate NIM of banks under our coverage declined both YoY and QoQ to 3.55%. The QoQ compression in NIM can be attributed to (i) a QoQ decrease in the IEA yield that was stronger than the QoQ improvement in COF; (ii) a slight drop QoQ in the CASA ratio and (iii) a QoQ increase in the NPL ratio to 1.9%.

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