TA Research said Maybank is well positioned to benefit from a possible increase in corporate loans and capital market activity.
PETALING JAYA: There is a potential earnings uplift from efforts to elevate regional transaction banking and group wealth for Malayan Banking Bhd
(Maybank).
In a report, TA Research said while Maybank is well positioned to benefit from a possible increase in corporate loans and capital market activity, the bank is also supercharging growth in the mid-market and small and medium-sized enterprises (SME) space.
The research house said Maybank recorded a healthy operating income growth of 8.7% year-on-year on the back of increased loan growth and higher non-interest income due to improved core fees and insurance performance.
Net interest margin has also been improving quarter-on-quarter, the report said.
TA Research said the bank’s asset quality has been healthy, with a reported lower net credit charge-off rate of 26 basis points, as loan provisions reduce, and bad debts recover.
On the bank’s valuation, TA Research said there is room to grow still, as it is currently trading near the mean of its 10-year price-to-book (P/B) valuation cycle.
The research house also said there has been renewed interest from foreign investors, with foreign shareholding inching up to 20.4% in recent months, compared to 19.0% in December 2023.
TA Research said it will maintain its “buy” call on the bank valuing it at RM12.15.
Risks include slower-than-expected growth in key regional markets like Indonesia and Singapore, coupled with a stronger ringgit, which could weigh on Maybank’s earnings.
