PETALING JAYA: Malayan Banking Bhd ’s financial year 2018 (FY18) to FY19 net profit forecasts have been revised upwards by some analysts after the lender released financial results that were largely within expectations.
RHB Research has raised its forecast by 6% to 9%, while revising upwards also the bank’s return on equity target to 11% from 10% previously.
The research house said in a report that the forecast revision was made after factoring in a better net interest margin, higher non-interest income and lower credit cost.
In addition, MIDF Research opined that loan growth would improve with the Malaysian market remaining steady, driven by mortgages, and in Indonesia with its government projects to support credit expansion.
“While loan growth was sluggish, we believe that it will improve in FY18. Also, asset quality seems to have improved in general.
“We are according a higher price-to-book value of 1.6 times from 1.4 times due to recovered earnings and reduction risk from the MFRS 9 (new accounting standard) implementation,” said MIDF Research.
Maybank posted a net profit of RM2.13bil for the fourth quarter of FY17 and earnings of RM7.5bil for the entire FY17, which were in line with consensus estimates.
The bank’s ROE rose to 10.6%, which came within management’s target of 10% to 11%, while a final dividend per share of 32 sen was declared.
Its sluggish gross loan growth of 1.7% year-on-year (y-o-y) to RM493.8bil was due to a contraction in its international segment, where it fell 2.9% y-o-y to RM200.9bil.
However, Malaysia’s gross loans grew 5% y-o-y to RM285.5bil.
The main drivers were mortgages with a 7.6% y-o-y growth to RM80.7bil, small and medium enterprises with a 19.7% y-o-y increase to RM14.9bil, and auto finance with a 5.3% y-o-y rise to RM80.7bil.
Shares in Maybank closed 0.2% lower at RM10.44 at the close yesterday, traded on a volume of 19.5 million shares.