Date: October 8, 2024
Broker: CGS International

Company Overview

Malayan Banking Berhad (Maybank) is one of Malaysia’s largest financial institutions, with a strong presence in Southeast Asia. The company is well-positioned to benefit from positive economic developments in the region, particularly in Johor and Singapore.

Growth Opportunities

Maybank is expected to be the largest banking beneficiary of the economic growth in Johor, driven by its strong exposure in both Malaysia and Singapore. These economic developments provide significant opportunities for Maybank’s operations in the region.

Performance in Indonesia

Maybank Indonesia (Maybank INDO) has experienced a decline in its Profit Before Tax (PTP) in the first half of 2024, largely due to corporate provisioning. However, Maybank INDO expects its PTP to recover sequentially in the second half of the year. This recovery is anticipated to come from improvements in corporate provisioning, positioning the Indonesian operations for stronger performance going forward.

Investment Outlook

The report maintains an “Add” rating for Maybank, supported by its robust fee income, effective capital management, and initiatives to enhance dividend yields and Return on Equity (ROE). These factors make Maybank an attractive investment in the financial sector.

Conclusion

Maybank’s strong presence in Malaysia, Singapore, and Indonesia, combined with its strategic capital management, positions the bank well to capitalize on regional economic growth. The bank’s potential for recovery in Indonesia and its strong fee income generation further support its positive outlook.