PETALING JAYA: Malayan Banking Bhd
’s (Maybank) net interest income (NII) in the fourth quarter ended Dec 31, 2024 (4Q24) may hold up reasonably well as, aside from loan growth, the bank was optimistic on net interest margin (NIM) as efforts to manage loan yield and deposit cost bear fruit.
According to RHB Research, following a recent meeting with management, it sensed Maybank was optimistic on NIM, as efforts to manage the year-to-date compression bore fruit.
“But we are uncertain if the full-year dividend payout ratio can meet our 76% assumption (financial year 2023 or FY23: 77%). Unlike 4Q23, when loans rose by a robust 4% quarter-on-quarter (q-o-q) thanks to global banking, sequential growth this time is set to be more modest,” the research house said.
It expected a 4Q24 dividend per share of (DPS) of 34 sen, higher than 31 sen in 4Q23, to be declared, which would bring FY24 DPS to 63 sen (FY23: 60 sen).
“That said, with the 1H24 payout ratio already down to 70% from 76% in 1H23, we do not discount the possibility of a downside risk to our DPS estimate.
“Assuming a second interim cash DPS of 31 sen, this would translate to a yield of 3% and a full-year payout ratio of 72.5%.”
It pointed out that Maybank’s 3Q24 NIM decreased by three basis points (bps) quarter-on-quarter (q-o-q), while the FY24 nine-month NIM was down 11 bps versus 2023.
“In line with its plans, Maybank continues to rebalance its loan book away from lower-yield loans such as global banking – a positive for yields in 4Q24,” RHB Research added.
The research house, which has maintained a “neutral” call on the stock with a target price of RM11, said its FY24 net profit assumption of RM10bil, up 7% year-on-year (y-o-y) implied Maybank’s 4Q24 net profit could see low-mid single digit drop q-o-q.
However, on a y-o-y basis, RHB Research believed, it may rise by a similar quantum.
On the funding side, it said Maybank’s current account and savings account or Casa growth was healthy, supported by M25+ initiatives such as digital onboarding and the cash management platform.
The research house believes that fee income could stay resilient on healthy card and loan-related fees.
In terms of operating expenditure, RHB Research expected a seasonal pick-up in 4Q operating expenditure with personnel and marketing costs likely the main culprits.
The stock closed 0.75% lower to RM10.52 yesterday, giving it a market capitalisation of RM126.94bil.
