Kenanga Research has maintained an “Outperform” recommendation for Malayan Banking Bhd with a TP of RM10.55 as it is based on an unchanged FY22E GGM-derived PBV of 1.37x (1SD above 5-year mean).
The research house said that it continues to position MAYBANK with its most favourable risk-to-reward profile coupled with the highest dividend yield (6-8%) in the industry paired with solid ROE prospects.
Kenanga said that Its market-leading position in loans and deposits should prove beneficial in an economic recovery phase while its CASA levels would ease access to funds.
“On its risks to our call include higher-than-expected margin squeeze, lower-than-expected loans growth, worse-than-expected deterioration in asset quality, a further slowdown in capital market activities, adverse currency fluctuations, and changes in OPR.”
Kenanga said that while the group will continue to be prudent with its asset quality management, it believes that it could outperform its initial credit cost guidance of 70-80bps for FY21 from staging improvements, in line with the economy reopening.
