PETALING JAYA: Malayan Banking Bhd
’s (Maybank) earnings outlook remains closely tied to the lender’s ability to defend its margins, accelerate higher-yield lending and navigate emerging macroeconomic risks.
Analysts generally view the bank’s first quarter ended March 31, 2026 (1Q26) performance as broadly within expectations, despite lingering concerns over key full-year targets.
The lender entered the remainder of financial year ended Dec 31, 2026 (FY26) with management maintaining its guidance – although several research houses highlighted potential downside risks to return on equity (ROE), loan growth and earnings momentum should market conditions remain challenging.
UOB Kay Hian (UOBKH) Research pointed out that the lender’s net interest margin (NIM) expanded five basis points (bps) quarter-on-quarter to 2.14% in 1Q26.
It said this was supported by asset-liability management initiatives and a 1.1 percentage-point optimisation of the loan-to- deposit ratio to 94.9%.
However, UOBKH Research cautioned that margin sustainability could prove challenging over the rest of the year.
“While management guides for stable five bps NIM expansion for 2026, the 1Q26 exit NIM of 2.14% implies potential sequential downside in the remaining quarters, should full-year NIM land within management’s 2.05% to 2.1% target range,” the research house further noted.
As a result, the research house retained a conservative stance on margins and maintained a “hold” call with a reduced target price of RM11.58, from RM12.30 previously, following earnings revisions.
TA Research said Maybank’s 1Q26 performance was broadly in line with expectations, supported by stronger NIM, resilient fee income growth and disciplined cost management.
“Looking ahead, management noted that NIM expansion will hinge on optimising the asset mix, shifting from mortgages toward higher margin SME (small and medium enterprise) and hire-purchase loans, while keeping rising deposit costs in check,” it said.
The research house, nevertheless, further noted that ROE and loan growth continued to trail management’s full-year targets.
“Despite that, management is sticking to its guidance for now, but the ROE target could face a revision in 2Q26 unless trading income rebounds meaningfully.
“Loan growth may also be at risk of a revision in 2Q26,” TA Research said.
The research house has reiterated a “buy” recommendation, while trimming its target price to RM13 from RM13.30 previously.
Hong Leong Investment Bank (HLIB) Research took a more cautious view of the near-term outlook, arguing that earnings would remain vulnerable to funding cost pressures despite management’s efforts to protect margins.
“Maybank’s near-term outlook hinges on aggressive asset-side rebalancing to defend its margins against intensifying deposit competition,” HLIB Research said.
The research house added that Maybank intends to reduce its exposure to lower margin mortgages and non-accretive corporate accounts.
Still, HLIB Research warned that “structural funding bottlenecks remain”, further noting the bank’s reliance on wholesale deposits and the need for long-term investment to build more stable retail deposit franchises.
The research house also flagged rising asset quality risks, stating that “full-year ROE and loan targets are tracking below expectations”.
“Barring a swift recovery in market trading execution, downward guidance revisions look plausible by the first half of 2026,” it said.
HLIB Research maintained a “buy” recommendation, but lowered its target price to RM11.90 from RM13 previously.
Meanwhile, CIMB Research has turned more cautious on valuation, downgrading the stock to a “hold” from “buy” previously and reducing its target price to RM10.50 from RM13.30.
According to the research house, the shares continued to trade above their long-term valuation average despite slowing earnings momentum and fewer re-rating catalysts.
CIMB Research also pointed out the “risk-reward turning more balanced at current levels” even though the bank retained a defensive franchise, visible dividend prospects and limited exposure to vulnerable sectors.
On another note, BIMB Research expects NIM pressures in Singapore and Indonesia to ease in FY26, helped by delayed US Federal Reserve rate cuts and tighter monetary conditions in Indonesia.
The research house said Basel III reforms could slightly affect capital ratios, adding that management had not indicated any intention to distribute excess capital through special dividends.
Notably, the dividend payouts of the lender are expected to remain around 70%.
Hence, BIMB Research revised its fair value to RM10.90 from RM11.50 previously.
According to RHB Research, management was retaining guidance for now, but acknowledged possible downside risks depending on macroeconomic developments.
“While it saw competition for deposits pick up lately, Maybank hopes to maintain NIM at the current level on the back of ongoing liability management initiative,” the research house said.
“It is also planning to address asset yield pressure by focusing on higher-yield segments such as auto and SME loans,” the research house noted.
The research house added that management remains watchful over rising cost pressures and has increased overlays to RM2.4bil to address emerging risks.
It maintained a “buy” recommendation while lowering its target price to RM12.20 from RM13.20 previously.
