MAYBANK (1155): Strategic Shift to Capital-Light Growth Drives BUY Rating
Summary (TL;DR):
- Research Firm: RHB Investment Bank
- Subject: MAYBANK / MAYBANK (1155)
- Core Rating: BUY
- Target Price / Top Picks: MYR 10.90
- One-Liner: Maybank’s ‘Super Growth’ strategy, focusing on capital-light, non-interest income streams like wealth management, mid-market, and FX sales, positions it for robust earnings and defensive stability.
Report at a Glance
RHB Investment Bank released its latest research report on MAYBANK on 2025-07-07, maintaining a “BUY“ rating with a target price of MYR 10.90. The core thesis of the report is that Maybank’s strategic focus on capital-light, non-interest income drivers, as highlighted in its “Super Growth” investor day, will underpin future earnings growth and enhance its defensive qualities.
Investment Thesis (The Bull Case)
- Point 1: Strong focus on Wealth Management (WM) with aspirations to double total financial assets, revenue, and wealth contribution to group fee income from 2024 levels, leveraging its large deposit base and strength in Islamic wealth.
- Point 2: Strategic expansion into the lucrative mid-market segment, adopting a targeted approach in high-growth regions (Penang, Johor, Sarawak, Singapore) and sectors (Johor-Singapore Special Economic Zone, data centre, semiconductor) with positive growth momentum and healthy ROA without sacrificing asset quality.
- Point 3 / Key Beneficiaries: Broadening Global Market FX sales by enhancing the FX ecosystem, driving efficiency, and increasing wallet share through cross-selling and customized solutions, leveraging its wholesale strength in Singapore and Malaysia. Additionally, Maybank is seen as defensive due to its relatively low foreign shareholding (c.19%), commitment to retaining absolute DPS, and healthy MYR1.8bn overlay buffers for asset quality risks.
Potential Risks (The Bear Case)
- Risk 1: Higher-than-expected credit costs impacting profitability.
- Risk 2: Weaker-than-expected Net Interest Margins (NIMs) due to competitive pressures or funding cost increases.
- Risk 3: Weaker-than-expected non-interest income (non-II) growth, potentially undermining the capital-light strategy.
Financial Forecast Summary
The analyst’s financial projections for the coming years are as follows:
| Fiscal Year (YE to Dec) | FY25F | FY26F | FY27F |
|---|---|---|---|
| Revenue (RM mil) | 30,501 | 32,095 | 33,641 |
| Net Profit (RM mil) | 10,364 | 10,947 | 11,459 |
| EPS (sen) | 86 | 91 | 95 |
| DPS (sen) | 62 | 64 | 67 |
| Dividend Yield (%) | 6.4 | 6.6 | 6.9 |
| P/E Ratio (x) | 11.34 | 10.74 | 10.26 |
(Source: RHB Investment Bank research report)
Valuation & Target Price
| Rating | BUY |
| Last Close Price | MYR 9.74 |
| Target Price (TP) | MYR 10.90 |
| Valuation Methodology | Intrinsic value derived from GGM-based P/BV of 1.3x, in line with the stock’s long-term P/BV mean, with a 4% ESG premium applied due to Maybank’s ESG score of 3.2 out of 4. |
Analyst’s Conclusion
- Overall Stance: RHB maintains its BUY rating on Maybank, expressing confidence in its strategic direction and defensive attributes.
- Key Catalyst/Strength: The strong emphasis on capital-light, non-interest income growth drivers, particularly wealth management, mid-market expansion, and global market FX sales, is expected to enhance ROE and provide sustainable earnings.
- Major Headwind/Risk: The primary risks include potential increases in credit costs, compression of Net Interest Margins (NIMs), and weaker-than-expected non-interest income performance.
- What to Watch: Investors should monitor the execution and progress of Maybank’s “Super Growth” initiatives, particularly the conversion of deposits into wealth management products, growth in the mid-market segment, and expansion of FX sales. Also, keep an eye on asset quality trends and NIMs.
Disclaimer: This article is a summary and interpretation of a research report published by RHB Investment Bank on 2025-07-07. All information is for reference purposes only and does not constitute investment advice. Investors should conduct their own independent research and due diligence and assume all associated risks.
