Maybank Likely To Shine In The Current Market Climate - HLIB

KUALA LUMPUR, Feb 27 (Bernama) -- Malayan Banking Bhd (Maybank) is expected to shine in the current market climate as investors seek refuge from the uncertainties surrounding United States (US) President Donald Trump 2.0, said Hong Leong Investment Bank Bhd (HLIB).

The investment bank anticipates that Maybank's net interest margin (NIM) will remain stable sequentially, given the easing seasonal fixed deposit competition and the opportunity to optimise its relatively low loan-to-deposit ratio of 91 per cent. 

"Additionally, Maybank plans to adopt a more disciplined loan expansion strategy and will not aggressively pursue deposits. As such, credit growth is expected to remain steady for now," it said in a research note today.

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Separately, net credit cost is projected to stay below 30 basis points, given the bank's strong asset quality, with Maybank retaining an RM1.7 billion provision overlay balance that serves as a profit buffer in times of need. 

Besides, Maybank's loan loss coverage currently stands at 122 per cent, a significant improvement from the pre-pandemic level of 73 per cent.

Given these factors, HLIB has maintained its "buy" call on Maybank setting a target price (TP) of RM11.35 per share.

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Meanwhile, Public Investment Bank Bhd (PIVB) forecast Maybank's loan growth to reach five per cent for the financial year 2025 (FY2025), driven by a gross domestic product growth of 4.9 per cent.

As such, PIVB reiterates the "buy" stance for Maybank with a higher dividend-based TP of RM11.60, post-earnings adjustment. 

Maybank has declared a second interim dividend of 32 sen, bringing the total FY2024 dividend per share to 61 sen. This translates to a dividend payout ratio of 73 per cent and an attractive dividend yield of six per cent.

As of 10.20, Maybank's share price fell two sen to RM10.68 with 1.08 million shares traded.

-- BERNAMA