According to Bloomberg data, 15 analysts rate Maybank a “buy” and four a “hold”, with target prices ranging from RM10.50 (CIMB Securities) to RM13.50 (CGS International Research). The latter implies between 10% and 20% upside potential currently, unless more analysts find reason to raise what they think Maybank shares could be worth in the coming 12 months.
An upward rerating of the stock would hinge on capital management initiatives and effective execution of its ROAR30 strategy, which runs from 2026 to 2030, say analysts contacted by The Edge.
Maybank is expected to provide clarity on capital management when announcing its 4QFY2025 results, tentatively scheduled for Feb 26.
“To rerate the stock, we’d need to see solid execution [of ROAR30] and capital management initiatives. These are the two main things,” says an analyst at AmInvestment Bank Research, who has a “hold” rating and a RM10.80 target price.
He believes there is limited scope for capital management at Maybank. “Dividends could be constrained by Maybank’s RM10 billion technology investment under ROAR30 — that’s RM2 billion a year, or 25% to 30% of its current dividend payout. It has capital needs for growth, particularly in the small and medium enterprises (SME) segment to defend asset yields. And it already has an elevated dividend payout ratio (DPR) of 73% relative to the sector’s 62%.”
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Additionally, the analyst notes that Maybank’s gearing, at 11.5 times, is higher than the sector’s 10.5 times, and its credit risk-weighted asset (RWA) density of 35% is low versus that of other internal ratings-based approach banks (40%). “That said, the 6% dividend yield remains attractive, but upside is largely limited to organic growth,” he says. Investors tend to like Maybank for its relatively high dividend yield and earnings stability, says Nomura Research banking analyst Tushar Mohata, who has a “buy” recommendation and a target price of RM12.40.
Asked about further rerating prospects, he says investors are first awaiting more details on the bank’s capital return programme. “Maybank has said it will provide clarity on this when it releases its fourth-quarter results,” he notes, adding that Malaysian banks are sitting on CET-1 ratios that are comfortably above regulatory minimums.
He points to recent examples among Singapore banks, which have provided forward-looking guidance on returning excess capital through higher dividends and share buybacks. In Malaysia, CIMB Group Holdings Bhd made a similar announcement when releasing its third-quarter results last November, voicing plans to return up to RM2 billion of capital to shareholders by 2027 via special dividends and/or share buybacks, starting with a 7 sen special dividend. The move contributed to a rerating of the stock, with CIMB’s share price up 9.5% since its Nov 28 announcement.
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“When it comes to Maybank, its business-as-usual DPR at 70%+ is already comfortably higher than CIMB’s 55%, so there is less headroom to raise the payout ratio,” Mohata says. “But because this is a fiveyear plan, if the bank can [spell out] the surplus capital it intends to release through dividends, that could improve yield expectations among investors.
“Secondly, we would also look at their guidance for 2026, which will be more near term,” he adds. “If that comes in above market expectations and includes further improvement in return on equity (ROE), then the stock may continue to rerate.”
He notes that Maybank, when planning its capital management, will need to factor in Basel III reforms in relation to credit RWA, which kick in from 2027, and reforms on market RWA later. Nevertheless, he expects the net impact of Basel III reforms to be manageable over FY2026 to FY2030. Maybank’s group CET-1 ratio — a key indicator of capital strength — stood at a strong 14.93% as at end-September last year.
Maybank’s dividend yield remains one of the industry’s best. AskEdge data shows that at 5.6%, it is the highest among the country’s banking groups after CIMB’s 5.7%. “Yields have become more important for Malaysian banks because, up till only quite recently, capital gains were substantial only in selected counters. So, for a lot of Malaysian banks, the bulk of the total shareholder returns came from dividends,” Mohata points out.
MBSB Research in a Jan 21 report on Maybank says that it is “not overly optimistic” on the prospect of special dividends or an increase in DPR so early in the bank’s multi-year plan.
Ambitious ROE target
Under ROAR30, a key target set by Maybank to be achieved by FY2030 is ROE of between 13% and 14%. It was at 11.5% as at 9MFY2025.
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The other targets include to sustain its net interest margin (NIM) at above 2.05% (9M25:2.03%), a current account and savings account (CASA) ratio of more than 41% (9MFY2025:39.9%), net credit charge-off rate at around 20 basis points (9MFY2025:11bps) and a cost-to-income ratio of no higher than 47% (9MFY2025:48.9%).
“We believe that now is the time for us to supercharge our business growth and capitalise on Asean’s growing significance,” president and group CEO Datuk Seri Khairussaleh Ramli told a media briefing last week.
MBSB Research notes that while Maybank’s ROAR30 ROE target may be difficult to achieve, it is still “plausible”. “We opine that the success of this operation is highly dependent on certain factors, such as how quickly Indonesia’s turnaround can take place and how well Maybank is able to manage its cost profile.” Maybank has guided for ROE of at least 11.3% for FY2025.
Nomura Research believes that to reach the upper end of the 13% to 14% ROE goal, some form of capital optimisation might be necessary.
“We think that ROAR30 is an aspirational next phase for Maybank, building on the execution momentum achieved under M25+ while pivoting the bank towards higher-quality, fee-led and ecosystem-driven growth. That said, the sheer size and complexity of Maybank likely mean that structural change will be gradual rather than transformative overnight,” it says in a Jan 20 report.
“We also note that the strategy is highly exposed to the external environment, particularly capital market conditions, regional trade flows, wealth sentiment, global rate moves and geopolitics, which could materially influence fee income trajectories, asset quality and NIM.”
RHB Research raised its target price for Maybank by 9% to RM12.35 last week as it believes “a mixture of liquidity inflows, a sanguine macroeconomic outlook and stronger earnings momentum” is all supportive of further valuation-multiple expansion.
“We lower our cost of equity by 50bps, leading to a higher Gordon Growth Model-based price-to-book value (PBV) of 1.43 times (from 1.3 times). We leave our forecasts unchanged, pending the upcoming 4QFY2025 results. Our FY2026-FY2027 forecasts assume stable NIM and credit cost of circa 26bps. Hence, there could be upside risks from better-than-expected NIM and/ or credit cost,” it says in a Jan 21 report.
The stock has gained 22.9% over the past six months, outperforming the FBM KLCI, which rose 13.2% over the same period to 1,719.99 points.
Maybank is the index’s largest constituent, with a weighting of about 13.37% as at Jan 22. The benchmark breached the 1,700 level on Jan 13 for the first time since March 1, 2019, and remained above that level at press time. A least two research houses see the FBM KLCI breaching 1,800 points by year-end if the economy performs better than expected.
