RHB Investment Bank Bhd (RHB Research) has reiterated its BUY call on Malayan Banking Bhd (Maybank) with a target price of RM10.90, offering an estimated 12% upside and a forecast dividend yield of around 6% for FY2025. Following Maybank’s “Super Growth” investor day held on July 4, the house highlighted three key areas set to drive growth: wealth management, mid-market lending and global market FX sales, most of which are capital-light and non-interest income segments.
In wealth management, Maybank’s group assets under management reached RM341 billion as of end-1Q25, split largely between Malaysia (55%) and Singapore (44%). Its strength lies in the affluent and emerging affluent segments, with further ambitions to tap into ultra-high-net-worth clientele through its established corporate banking network. Wealth management fees generated RM1.17 billion in 2024, contributing 15% of core non-interest income.
With around 78% of AUM still in deposits versus the 40–60% seen at Singaporean peers, Maybank sees strong conversion potential to wealth products. It aims to double total financial assets, revenue and wealth contributions to fee income through digital initiatives and geographical expansion into Indonesia and the Philippines.
In the mid-market segment, Maybank’s current exposure represents 15% of global banking loans in Malaysia and 20% in Singapore. While this remains a smaller portion of the overall loan book, targeted efforts in high-growth regions such as Penang, Johor, Sarawak and Singapore as well as sectors like semiconductors and data centres, are beginning to show results. The bank estimates this segment yields a return on assets of 1.5%, compared to the group’s 2024 ROA of 1%. Notably, RHB Research highlighted that this expansion has not come at the expense of asset quality.
Maybank’s FX sales strategy is centred around expanding its FX ecosystem and revenue base via cross-selling, client customisation and increased wallet share. Its wholesale banking strength in Singapore and Malaysia underpins this push with a clear emphasis on integrating FX offerings with broader banking services to deepen client relationships.
While the group’s operating expenses remain elevated particularly in the wealth segment due to personnel costs, Maybank is stepping up investments in technology and digital infrastructure. Cost-to-income ratios vary across the growth pillars with wealth management CIR exceeding 40%, while mid-market and FX sales remain more efficient.
RHB Research also applied a 4% valuation premium in its target price to reflect Maybank’s ESG score of 3.2, which is above Malaysia’s country median of 3.0. With relatively low foreign shareholding at approximately 19%, a commitment to dividend payouts and robust RM1.8 billion overlay buffers, the house sees Maybank as a defensive pick with clear visibility on future growth drivers.
