KUALA LUMPUR, Nov 23 — Maybank’s net interest margin (NIM) is expected to improve in the fourth quarter of 2023 (4Q 2023) as its “local fixed deposit (FD) rivalry has stayed benign and expensive FD from the January to March 2023 cohort will be repriced downwards.”
In addition, the management “looks to shy away from price-based competition and emphasise on a non-rates proposition instead,” Hong Leong Investment Bank (HLIB) said in a note today.
“Also, loan growth is seen to chug along for now. Besides, we are not worried about asset quality as we believe Maybank is better equipped versus prior slumps; the large loan loss provisions built up over the past three years act as a robust buffer to cushion any short-term rise in the gross impaired loan (GIL) ratio that may potentially stem from macro headwinds and tight monetary policy,” it added.
HLIB noted that Maybank’s third quarter profit nudged up 1.0 per cent quarter-on-quarter, driven by lower loan loss provision and effective tax rate, which helped to offset the tepid top-line.
“That said, loan growth held firm and the GIL ratio improved. However, NIM narrowed sequentially. Overall, results were in line and hence, FY2023-25 forecasts were unchanged.
“All in all, we still believe that Maybank’s risk-reward profile is balanced as there are no fresh positive catalysts to spur share price upwards,” it said.
Meanwhile, Kenanga Research has maintained its “outperform” call on the bank with a target price of RM9.95.
“Maybank is expected to demonstrate operational resilience whilst sustaining its position as the leading bank in terms of market share.
“We believe Maybank’s ability to provide the most sustainable returns via its consistent market-leading dividend yields (7−8.0 per cent) warrants further accumulation of its shares,” it said in a note. — Bernama
