PETALING JAYA: Malayan Banking Bhd
(Maybank) is expected to see double-digit year-on-year (y-o-y) growth in the second half of 2023 (2H23), underpinned by the absence of prosperity tax and stronger non-interest income (NIM).
CGS-CIMB Research said it expected Maybank’s net profit to grow 16% y-o-y in 2H23.
“We expect its net credit cost to be largely stable at 30 to 35 basis points in 2H23 versus 32 basis points in the previous corresponding period,” it said in a report.
Meanwhile, Kenanga Research said it expected Maybank’s 2023 NIM to remain hurt by the intensive deposit competition, following the progressive overnight policy rate hikes in the past year.
“Previously guiding a five basis point compression, a widened erosion of 25 basis points is now expected.
“That said, recovery could be seen in the coming quarters as product pricing is gradually rationalising,” it said.
Going forward, Kenanga Research said Maybank is expected to demonstrate operational resilience while sustaining its position as the leading bank in terms of market share.
“However, current price points appear to have diluted its dividend yield proposition, which previously stood at 8%.
“We opine newer investors may seek higher growth prospects with yield surprises among its peers.”
Separately, Hong Leong Investment Bank (HLIB) Research said it sees NIM stabilising from the third quarter of this year onward, since fixed-deposit competition is benign locally.
“Hence, fixed deposits for the January to March 2023 cohort will likely start to be repriced at lower rates. However, its Singapore operations may limit upside, no thanks to higher funding cost.”
HLIB Research said credit growth is tapering further due to a softer macro environment.
“We are not overly concerned about asset quality as we believe Maybank is better equipped compared with prior slumps.
“The large loan loss provisions built up over the past three years act as a robust buffer to cushion any short-term spike in gross impaired loan ratio that may potentially stem from macro headwinds and tight monetary policy.”
Maybank, the fourth largest bank in South-East Asia by assets, posted a 45.4% y-o-y jump in net profit to RM2.34bil in the second quarter of 2023 for an earnings per share (EPS) of 19.4 sen.
This compares to a net profit of RM1.61bil in the same quarter in 2022 and EPS of 13.44 sen.
