PETALING JAYA: Malayan Banking Bhd
(Maybank) is poised for steady growth, underpinned by robust economic prospects across its key markets, including Malaysia, Singapore, and Indonesia.
Analysts are optimistic about Maybank’s outlook, underpinned by the anticipated growth in domestic spending.
TA Research noted that Maybank’s management anticipates “steady economic growth across key markets, supported by domestic spending, infrastructure projects, and rising manufacturing activity”.
While Bank Negara is expected to maintain the overnight policy rate (OPR) at 3%, accommodative policies in Singapore and Indonesia could fuel credit demand, contributing to Maybank’s growth trajectory.
In Malaysia, loan growth remains robust amid a healthy economy, with stable net interest margins (NIMs) and benign credit costs. Singapore is likely to benefit from higher loan yields stemming from Asean supply chain shifts, although increased competition from digital players may present challenges. Meanwhile, Indonesia’s loan growth is projected at 9%-10% year-on-year, despite tighter liquidity in the first half of the year, as asset quality remains solid due to minimal exposure to high-risk micro, small and medium enterprises (MSMEs).
For 2025, Maybank aims to achieve a return on equity (ROE) exceeding 11.3%, driven by 5%-6% loan growth, stable NIMs, and a cost-to-income (CTI) ratio below 49%.
“Recovery efforts will be prioritised to achieve a sustained net credit charge-off rate of less than 30 basis points,” TA Research added.
TA Research reiterated its “buy” call on Maybank, with a target price of RM12.15, based on an implied price-to-book value (PBV) of 1.46 times.
Maybank recently announced a 7.9% increase in net profit for the 2024 financial year (FY24), reaching a historic high of RM10.09bil compared to RM9.35bil in FY23. Earnings per share rose to 83.61 sen from 77.55 sen, while revenue grew to RM68.94bil from RM63.52bil previously.
The group’s net operating income increased by 8.1% to RM29.57 billion, supported by a 22.6% surge in non-interest income, primarily from wealth management and investment banking fees, as well as contributions from global markets and insurance. Net fund-based income also rose by 2% to RM19.69 billion, underpinned by a loan growth of 5.3% year-on-year. Maybank's NIM stood at 2.05%, reflecting higher funding costs and deposit competition, although it improved by three basis points in the fourth quarter of FY24.
CGSI Research maintained its “add” rating, projecting a net profit growth of 7.9% for FY25, underpinned by higher net interest income and lower loan loss provisions. “The stock is also supported by attractive dividend yields of 6% for FY25,” it noted, with a dividend discount model (DDM)-based target price of RM12.80.
Meanwhile, Hong Leong Investment Bank (HLIB) Research highlighted Maybank’s stable NIM and disciplined loan expansion strategy, retaining its “buy” call, with a target price of RM11.35. It emphasised Maybank’s strong asset quality and provision overlay balance of RM1.7bil as potential profit levers.
“We expect NIM to stay stable sequentially given easing seasonal fixed deposit rivalry and scope to optimise its relatively low loan-to-deposit ratio of 91%. Also, Maybank intends to employ a more disciplined loans expansion strategy and would not be aggressively hunting for deposits. As such, credit growth is seen to chug along for now,” HLIB Research said.
MIDF Research kept its “buy” call unchanged, with a target price of RM12.11, citing Maybank’s solid earnings performance and resilient dividend yield of approximately 6%. CIMB Research also maintained its “buy” recommendation with a target price of RM11.80, noting key catalysts such as better treasury performance and sustained dividend payouts.
“We expect that FY25 prospects remains the same given our expectation of stable economic growth and unchanged OPR. We believe that this should provide investors with a defensive option given the current volatile market condition especially the attractive dividend yield,” MIDF Research said.
Overall, analysts agree that Maybank’s regional exposure, leadership position, and dividend appeal make it a solid choice for investors seeking stability amid market uncertainties.
