KUALA LUMPUR: Malayan Banking Bhd's (Maybank) third quarter ended Sept 30, 2023 (3Q23) results were in line with expectations, according to Hong Leong Investment Bank Bhd's (HLIB Research).
The investment bank said the earnings made up 75 to 76 per cent of its consensus full-year forecasts.
Maybank registered 3Q23 earnings of RM2.4 billion, bringing the nine-month period ended Sept 30, 2023 (9M23) sum to RM7 billion.
On outlook, HLIB Research said it expects Maybank's net interest margin (NIM) to improve in 4Q23 since local fixed deposit (FD) rivalry has stayed benign and expensive FD from the January to March 2023 cohort will be repriced downwards.
"In addition, management looks to shy away from price-based competition and emphasise on non-rates propositions instead.
"Also, loan growth is seen to chug along for now," it said in its research note.
Furthermore, HLIB Research said it is not worried about asset quality, as it believes Maybank is better equipped versus prior slumps.
It added that the large loan loss provisions built up over the past three years act as a robust buffer to cushion any short-term rise in the gross impaired loans (GIL) ratio that may potentially stem from macro headwinds and tight monetary policy.
Meanwhile, HLIB Research has maintained its "hold" call on Maybank, with a target price (TP) of RM9.20.
It has also kept the bank's financial year 2023–2025 (FY23–FY25) forecasts unchanged since 3Q23 results were in line.
On that note, HLIB Research said Maybank's risk-reward profile is balanced, as there are no new positive catalysts to spur share prices upward.
It was noted that in the big-cap space, the preference is to buy into Public Bank Bhd (TP: RM4.80) given its better asset quality and that its foreign shareholding is near a multi-year low.