PETALING JAYA: Malayan Banking Bhd
(Maybank) continues to be the top pick in the banking sector for Affin Hwang Investment Bank Research (Affin Hwang Research), supported by its resilient performance, regional presence and achievable financial targets for 2025 despite global uncertainties.
The research house has reiterated its “buy” call on the stock, maintaining a target price of RM12.10 per share, based on a price-to-book value multiple of 1.53 times its estimated book value per share for calendar year 2025.
“In our view, the Maybank remains resilient and robust amidst global uncertainties. We believe that its 2025 financial targets are achievable – return on equity of at least 11.3%, cost-to-income ratio (CIR) of 49% or lower, loan growth of between 5% and 6%, and net credit charge of no more than 30 basis points (bps),” it noted.
Affin Hwang Research said Maybank leverages its Asean regional footprint, with a customer base of 15 million individual customers, one million small and medium enterprises (SMEs), and 15,000 corporate clients.
“One of Maybank’s key strengths, which is in cross-border payment systems, has been supporting growth across regional economic corridors (Malaysia-Singapore/Asean),” it added.
For financial year 2025 (FY25) to FY27, Affin Hwang Research is keeping most of its assumptions for Maybank unchanged – including a net interest margin (NIM) of around 2.05%, a CIR between 47% and 49%, a net credit charge (NCC) at about 30bps, and annual loan growth of 5% to 7%.
The research house noted that the bank is maintaining its FY25 key financial targets, despite global headwinds and rising geopolitical risks.
“Management foresees minimal downside risks to its NCC guidance, having adopted a conservative credit provisioning stance and maintaining low exposure to vulnerable sectors such as multinational corporations in the electrical and electronics industry and their SME supply chains.”
Affin Hwang Research said Maybank has also reaffirmed a stable NIM outlook for 2025 compared with 2024, supported by strategic portfolio reshaping including a “selective reduction of lower-yielding assets such as mortgages, careful loan book composition management and a focus on higher-yielding segments”.
On the data centre front, although Maybank’s exposure stands at less than 1% of its total portfolio – at RM5bil out of a RM675bil loan book – Affin Hwang Research said the bank is “taking a cautious approach” in this space.
“The group is currently reassessing its risk appetite in this area, choosing to take a breather from the market. It remains highly selective in financing data centre projects, prioritising those with strong off-takers, principled counterparties and a clear emphasis on quality over quantity,” it said.
