Analysts: Maybank likely to achieve its FY21 targets

KUCHING: Malayan Banking Bhd (Maybank) will likely achieve its financial year 2021 (FY21) targets despite its flattish third quarter of FY21 (3QFY21) performance, analysts observed.

According to Kenanga Investment Bank Bhd’s research team (Kenanga Research), Maybank’s 3QFY21 total income was flattish, as a 12 per cent gain in NOII led by derivatives was offset by poorer NII (down three per cent), dragged by lower NIMs (2.30 per cent, down 12bps).

It noted that Maybank explained that this was an impact of PEMULIH led modification losses (estimated RM150 million). Comparatively, provisions more than doubled (RM1.13 billion compared with RM525 million) as more bookings were made on new reliefs.

Notably, local repayment assistance rose to 30.6 per cent in November 2021 (August 2021: 27.1 per cent). With that, 3QFY21 PATAMI came in at RM1.69 billion (down 14 per cent).

Kenanga Research said while the group said it would continue to be prudent with its asset quality management, Maybank believes that it could outperform its initial credit cost guidance of 70 to 80bps for FY21 from staging improvements, in line with the economy reopening.

However, there could be further modification losses recorded arising from URUS applications in November 2021. At this moment, the amount of applications under the programme are manageable, with B50 customers only expected to make up less than 30 per cent of total TRA mix.

It noted that SMEs are still viewed to be a highly at-risk segment; it may contribute meaningfully as their performances could be propelled by looser movement restrictions.

“Meanwhile, we believe the group is in the clear to achieve its FY21 targets. Any unforeseen tightening in December 2021 should not meaningfully undermine its YTD progress, albeit may raise some concerns for FY22 which hinge on the continuous momentum of economic recovery,” it opined.

All in, Kenanga Research maintained its ‘outperform’ rating on the stock.