In the fourth quarter of 2023 (4Q 2023), Maybank’s net interest margin (NIM) is anticipated to increase due to the company’s “price reduction on expensive fixed deposit (FD) from the January to March 2023 cohort” and “patrimony that has remained benign.”
Furthermore, Hong Leong Investment Bank (HLIB) stated in a note today that the management “looks to shy away from price-based competition and emphasise on a non-rates proposition instead.”
Also, loan growth is anticipated to continue for the time being. Furthermore, we don’t worry about asset quality because we think Maybank is better prepared than it was in previous downturns. The substantial loan loss provisions that Maybank has accumulated over the last three years serve as a strong buffer against any temporary increase in the gross impaired loan (GIL) ratio that might result from macroeconomic headwinds and tight monetary policy, the statement continued.
HLIB said that despite a weak top line, Maybank’s third quarter profit increased by 1.0% on a quarter-over-quarter basis due to decreased loan loss provisions and an effective tax rate.
Nevertheless, loan growth continued and the GIL ratio got better. NIM did, however, sequentially narrow. Since the overall results were consistent, the projections for FY2023–25 remained unchanged.
Overall, the statement read, “We continue to believe that Maybank’s risk-reward profile is balanced because there aren’t any new positive catalysts to drive the share price upward.”
Kenanga Research, meanwhile, is sticking with its “outperform” recommendation for the bank, with an RM9.95 target price.
It is anticipated that Maybank will exhibit resilience in its operations while maintaining its top spot in terms of market share.
“We think that Maybank’s capacity to offer the most enduring returns through its steady market-leading dividend yields (7−8.0%) justifies additional building of its stock,” the company stated in a statement. —
