KUALA LUMPUR, Feb 26 — Analysts have positive calls for Malayan Banking Bhd (Maybank) after the bank posted firm results for the financial year ended Dec 31, 2020 (FY20) in line with market expectations.
In a filing with Bursa Malaysia on Thursday, Maybank, the largest bank by assets in Malaysia, said its FY20 net profit slipped to RM6.48 billion compared with RM8.20 billion in FY19.
That was due to significantly higher net impairment losses, owing to the continued impact from the Covid-19 pandemic, it said.
Hence, MIDF Research has upgraded its call on Maybank to “buy” from “neutral” with an unchanged target price (TP) of RM8.70.
Head of research Imran Yassin Yusof said the group’s FY20 earnings were within the research house’s expectations, with pockets of improvement such as the improved net interest margin (NIM), while non-interest income (NOII) remains strong and the elevated provisions are understandable at the current juncture.
“We expect credit cost will continue to be elevated at least until the first quarter of FY21.
“While there are short-term headwinds, we believe that group will be able to weather it and in our opinion we could look forward to better years in FY21 and FY22 as we expect a more certain economic recovery following the rollout of the vaccine,” he said.
Meanwhile, Kenanga Research has maintained its “outperform” call on Maybank with a higher FY22-estimate Gordon growth model (GGM)-derived price-book-value TP of RM9.10 from RM8.60 earlier.
Analyst Clement Chua said while the company registered a lower FY20 profit after tax and minority interests (Patami) of RM6.48 billion, it was within expectations, but a full-year dividend of 52 sen was more generous-than-expected.
“The group is anticipating further impairment needs for FY21 as uncertainties persist.
“That said, with economic activity looking to regain its footing, we believe Maybank is poised to reap from its market leading position, and we also anticipate dividend yields to be attractive again,” Chua said.
Meanwhile, RHB Research has maintained its “buy” call on Maybank with an unchanged TP of RM10.00.
Its analysts, Liew Wai Hoong and Fiona Leong said the bank’s FY20 earnings beat the research house’s estimates, but were in line with that of the street.
Maybank’s management is hopeful on the recovery in 2021, as the deployment of Covid-19 vaccines should widen across the region, and this is despite near-term risks and the recovery being uneven, they said.
At 10.27am, Maybank’s share added five sen to RM8.14 with 2.51 million shares changing hands. — Bernama
