Muted Maybank quarterly earnings on the absence of top line drivers
The research house, in a report, said the banking group's net interest income is expected to be sustained, given some relief from the 100 basis points (bps) cut in the statutory reserve requirement to mitigate funding cost pressure.
On the other hand, the non-interest income might be weighed down by slower fee growth and equity mark-to-market losses from its insurance business.
Sticky operating expenses, particularly personnel costs, are also likely to remain the biggest drag, limiting prospects for near-term outperformance, added the research house.
Given the limited earnings upside amid a cautious macro environment, CGSI Research has maintained a 'hold' rating on Maybank with a revised target price of RM9.85 per share, rolled forward to the financial year 2026 (FY26) valuation.
This is based on a FY26 forecast price-to-book value target multiple of 1.21 times, underpinned by a return on equity of 10.4% and a cost of equity 9.1%.
'Our assumptions reflect expectations of subdued near-term earnings momentum as macro headwinds, including global supply chain disruptions, softer trade activities that may continue to moderate domestic activities from 2H25 (first half of 2025) to 1H26,' the research house noted.
Having said that, Maybank's fundamentals remained supported by healthy capital levels, a strong liquidity position, diversified funding profile, sound asset quality and extensive Asean banking franchise.
However, the balance of risk and reward appeared 'neutral' in the short term, it added.
CGSI Research also projected Maybank's 2H25 earnings to moderate due several factors, including the net interest margin compression following the July 25 bps overnight policy cut and asset-liability mismatches.
This was followed by the softening loan growth momentum amid weaker trade and investment flows as well as a more cautious lending stance.
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