RHB Research maintained its earnings forecasts for Maybank.
PETALING JAYA: Malayan Banking Bhd
’s (Maybank) growth trajectory over the next five years is expected to hinge on its ability to convert strategic ambition into sustained returns, with analysts broadly constructive that its newly unveiled ROAR30 plan sets a clearer path towards higher profitability and valuation uplift amid a supportive macroeconomic backdrop.
Early assessments point to optimism that the group’s forward-looking targets, particularly its aspiration to lift return on equity (ROE) to 13% to 14% by 2030, could be underpinned by stronger earnings momentum, disciplined capital deployment and continued balance sheet optimisation.
RHB Research raised its target price for Maybank by 9% to RM12.35, citing improving market conditions and earnings visibility.
“We believe a mixture of liquidity inflows, a sanguine macroeconomic outlook, and stronger earnings momentum are all supportive of further valuation multiple expansion,” it said, adding that it had lowered its cost of equity by 50 basis points (bps), resulting in a higher Gordon Growth Model-based price-to-book value multiple of 1.43 times.
RHB Research maintained its earnings forecasts for Maybank, assuming stable net interest margins (NIM) and credit costs of about 26 bps for 2026 to 2027, while flagging potential upside from better-than-expected margins or asset quality.
ROAR30, which succeeds Maybank’s earlier M25+ plan, covers the 2026 to 2030 period, with the objective of driving ROE towards the mid-teens by 2030.
Other key financial targets include NIM of above 2.05%; a cost-to-income ratio (CIR) of no more than 47%; a current account savings account (Casa) ratio of at least 41%; stable net credit charges of around 20 bps; 5% to 6% compound annual growth in net operating income and overseas income; and 6% to 7% growth in core fee income.
“Management said its ROE target is based on organic growth and has yet to factor in capital management initiatives – more will be revealed in its upcoming fourth-quarter 2025 results briefing,” RHB Research said.
It highlighted ongoing efforts to manage funding costs, noting progress on the liabilities side and selective improvements in asset yields, particularly in the small and medium enterprise segment.
It also pointed to moderating drag from Indonesia as loan rebalancing away from state-owned enterprises eases.
An analyst said the market’s initial reaction suggests investors are placing greater weight on Maybank’s ability to execute rather than the ambition of the targets themselves.
“What stands out is not just the numerical goals, but the clearer prioritisation of fee-based income and capital efficiency, which should help narrow the gap between headline ROE targets and actual delivery over the cycle,” the analyst said.
With a positive take on ROAR30, Public Investment Bank (PIB) Research raised its target price for Maybank to RM11.70 from RM11.20 previously, and maintained an “outperform” rating on the counter.
“We raise our target price on Maybank as we lower our cost of equity assumption to 8.3%, on sustained asset quality improvement and higher share of low-cost Casa deposits,” it said, adding that the stock’s dividend yield of about 6% remained attractive.
“Maybank intends to leverage on its competitive edge as a deeply entrenched Asean bank to establish a regional and global leadership across four major areas – Islamic finance, wealth management, transactions and payments, and corporate and investment banking,” PIB Research said.
“This will help Maybank unlock growth through synergies, providing holistic banking solutions to ring-fence liquidity and fund flows within Maybank’s ecosystem, thereby boosting income and profitability,” it added.
Technology investment is another key plank of ROAR30, with RM10bil earmarked over five years.
PIB Research cautioned that this could pressure CIRs, but noted management’s confidence in offsetting higher costs through productivity gains, automation and workforce attrition.
Meanwhile, CIMB Research viewed ROAR30 as an evolution rather than a departure.
“In our view, there is no fundamental change in Maybank’s core direction,” it said, adding that the key shift lies in monetisation and return optimisation.
The focus on four scalable businesses is expected to deliver about half of the incremental uplift in operating income by 2030.
CIMB Research maintained its “buy” call and target price of RM10.50, highlighting ROAR30’s explicit pivot towards fee income scalability and capital-efficient growth, with potential upside from a lower net credit charge target.
TA Research echoed that the 2030 targets are broadly achievable, albeit with execution risks.
“Delivery will be predicated on a sustained regional recovery, as balance sheet expansion and fee growth are closely tied to Asean’s growth dynamics.
“For efficiency, the higher CIR tolerance reflects a more realistic acknowledgement of elevated technology investment requirements under ROAR30,” it explained.
TA Research reiterated a “buy” recommendation and lifted its target price to RM12.40 from RM11.40.
Maybank shares were trading at RM11.10 at the time of writing, up 8% in the past year.
Kenanga Research, while more measured on near-term upside, maintained an “outperform” rating on Maybank, with an unchanged target price of RM11.30, noting that initiatives would likely require an incubation period before translating into earnings accretion and that dividend prospects remained compelling at above 6%.
“We have opted not to factor in any near-term upside post-briefing, as the group’s initiatives are likely to be rolled out in phases, with a near-term incubation period required before meaningful earnings accretion can materialise,” it said.
Under ROAR30, management also did not provide specific loan growth targets, which suggests growth will likely remain aligned with macro conditions across its key markets,” Kenanga Research said.
