Malayan Banking Berhad - 4QFY24 results: Strong Loan Growth Outlook
Thu, 27-Feb-2025 07:25 am
by Samuel Woo • Apex Research

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MAYBANK (1155)

Target Price (RM)

11.420

Recommendation

Hold

Summary

  • MAYBANK’s 4QFY24 core net profit added +6% yoy and remained flattish qoq to RM2.53bn, bringing FY24 core net profit at RM10.09bn (+8% yoy), which was deemed within expectations, accounting for 104% and 102% of our and consensus expectations, respectively.

  • Management’s tone: Neutral.

  • Downgrade to HOLD recommendation with a higher target price of RM11.42, based on FY25F GGM-PBV of 1.38x.

 

Results within expectations. FY24 core net profit at RM10.09bn (+8% yoy) came within expectations, accounting for 104% of our core net profit forecast at RM9.69bn and was at 102% of consensus forecasted net profit of RM9.93bn.

 

YoY. 4QFY24 core net profit added +6% yoy to RM2.53bn, driven by improved NII, NOII and provisioning, offsetting higher tax income. FY24 core net profit jumped +8% yoy to RM10.09bn due to better NII and NOII, offsetting higher OPEX and tax charges.

 

QoQ. 4QFY24 core net profit remained flattish. Improvements in NII and NOII were offset by higher OPEX charges.

 

Outlook. Group believes its FY25F loan growth target of 5-6% is conservative, and can be beaten while hoping to keep NIMs stable.  Management warns of -14bps negative impact to CET1 ratio in FY25F, as result of Basel III implementation concerning operational RWAs.

 

Earnings Revision. We increase our FY25F earnings forecasts by +1.9% to account for higher loan growth.

 

Valuation. Downgrade to HOLD recommendation on MAYBANK with a higher target price of RM11.42, based on an FY25F P/BV of 1.38x GGM-PBV valuation and +3% ESG factored premium based on 5-star ESG rating. Despite increased earnings forecasts, MAY’s share price has risen and the stock is fairly priced in now. Our higher target price is due to increased earnings forecasts and newly-added ESG premium.

 

Risks. (1) Weaker-than-expected loan growth, (2) Higher-than-expected NCC, (3) Elevated OPEX

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