Maybank (1155 KL), Public Bank (1295 KL), CIMB Group (1023 KL), Hong Leong Bank (5819 KL), RHB Bank (1066 KL), AMMB Holdings (1015 KL), Alliance Bank Malaysia (2488 KL), BIMB Holdings (5258 KL)

🏦 Maybank (1155 KL) – Solid Performance Amid Competitive Pressures

Recommendation: Not Rated
Target Price: Not provided
Stop Loss: Not specified
Date of Recommendation: 2nd September 2024
Broker: Maybank Investment Bank Berhad

Investment Thesis: Maybank – Navigating a Competitive Landscape with Resilience

Maybank remains one of the leading financial institutions in Malaysia, navigating through competitive pressures with a steady performance. Despite active competition in the mortgage space, Maybank has managed to maintain a robust loan growth trajectory, driven by its extensive market presence and customer base.

Loan Growth: Maybank’s loan book expanded by 10.6% year-on-year (YoY) in Malaysia and 12.5% in Singapore by the end of June 2024. Its Indonesian loan book also showed solid growth, increasing by 12.1% YoY, highlighting Maybank’s strong regional footprint.
Net Interest Margins (NIMs): The bank experienced a slight compression in NIMs by 4 basis points (bps) year-to-date (YTD) due to intense price competition, particularly in the mortgage sector. However, the overall impact on profitability remains manageable.

Valuation and Financials:
Maybank’s exact valuation metrics were not provided in the report. The bank continues to show resilience in its financial performance, with stable credit costs and a robust capital position.

Share Price Catalysts:

Potential stabilization or improvement in NIMs if competition eases.
Continued strong loan growth, particularly in key markets like Malaysia, Singapore, and Indonesia.

🏦 Public Bank (1295 KL) – Stable Growth with Strong Asset Quality

Recommendation: BUY
Target Price: MYR 5.40
Stop Loss: Not specified
Date of Recommendation: 2nd September 2024
Broker: Maybank Investment Bank Berhad

Investment Thesis: Public Bank – Leveraging Strong Asset Quality for Consistent Returns

Public Bank is renowned for its strong asset quality and conservative risk management, which have consistently delivered stable returns. The bank’s robust loan growth and expanding net interest margins position it well for continued success.

Loan Growth: Public Bank recorded a steady 6.0% YoY growth in its loan book by June 2024, driven by strong performance in both consumer and commercial segments.
Net Interest Margins (NIMs): The bank’s NIMs have improved slightly, reaching 2.19% YTD, reflecting its ability to maintain profitability despite competitive pressures.

Valuation and Financials:
Public Bank is currently trading at a price-to-earnings (P/E) ratio of 13.0x for FY24E, with a projected return on equity (ROE) of 12.6%. The bank’s strong capital position and low credit costs further enhance its attractiveness as an investment.

Share Price Catalysts:

Continued growth in the loan book, particularly in the consumer segment.
Stable or improving NIMs as the competitive environment stabilizes.

🏦 CIMB Group (1023 KL) – Strategic Growth with Robust Earnings Outlook

Recommendation: BUY
Target Price: MYR 9.20
Stop Loss: Not specified
Date of Recommendation: 2nd September 2024
Broker: Maybank Investment Bank Berhad

Investment Thesis: CIMB Group – Positioned for Growth with a Strong Earnings Base

CIMB Group continues to execute its strategic growth initiatives effectively, leading to robust earnings growth and an expanding market presence. The bank’s diversified revenue streams and focus on regional expansion underpin its positive outlook.

Earnings Growth: CIMB’s core net profit grew by 14% YoY in 1H24, driven by strong performance across its key markets, particularly in Malaysia and Indonesia.
Net Interest Margins (NIMs): The bank has seen a marginal improvement in NIMs, reaching 2.22% YTD, supported by disciplined pricing strategies and efficient cost management.

Valuation and Financials:
CIMB is valued at a P/E ratio of 11.0x for FY24E, with a strong ROE of 11.1%. The bank’s robust earnings base and strategic focus on high-growth markets make it a compelling investment.

Share Price Catalysts:

Successful execution of regional growth strategies.
Further improvement in NIMs and continued earnings growth.

🏦 Hong Leong Bank (5819 KL) – Consistent Performer with Strong Capital Position

Recommendation: BUY
Target Price: MYR 24.30
Stop Loss: Not specified
Date of Recommendation: 2nd September 2024
Broker: Maybank Investment Bank Berhad

Investment Thesis: Hong Leong Bank – Leveraging Capital Strength for Growth

Hong Leong Bank stands out for its strong capital position and consistent financial performance. The bank’s disciplined approach to risk management and focus on core markets provide a stable foundation for growth.

Capital Position: Hong Leong Bank’s Common Equity Tier 1 (CET1) ratio improved to 13.3% by the end of June 2024, providing a solid buffer for future growth initiatives.
Loan Growth: The bank reported a 7.3% YoY growth in its loan book, with strong contributions from the mortgage and SME segments.

Valuation and Financials:
Hong Leong Bank is currently trading at a P/E ratio of 10.0x for FY24E, with a projected ROE of 11.8%. The bank’s strong capital position and consistent performance make it a reliable investment choice.

Share Price Catalysts:

Continued growth in the loan book, particularly in key segments like mortgages and SMEs.
Stable NIMs and a strong capital position supporting future growth.Thank you