CGS reaffirms 'add' on Maybank, highlights potential write-backs

CGS reaffirms 'add' on Maybank, highlights potential write-backs

KUALA LUMPUR (July 9): CGS International has reiterated its 'add' recommendation on Malayan Banking Bhd (KL:MAYBANK), citing potential write-backs of its management overlay, robust loan/fee income growth, and capital management initiatives as key rerating catalysts.

CGS noted that at Etiqa's virtual Investor Day on July 4, Maybank’s insurance arm presented its robust performance and regional expansion strategy.

Etiqa, operating in five countries, reported an 133.7% increase in pre-tax profit to RM1.11 billion for the financial year ended Dec 31, 2023 (FY2023), driven by gross premiums of RM11.5 billion.

Under Maybank’s M25+ strategic plan, “the group aims to become a regional leader in insurance”, with targets of RM206 million in FY2023 and RM650 million in FY2024 for gross written premium (GWP) upliftment.

Etiqa has already exceeded its FY2023 target with a GWP upliftment of RM320 million, and remains ahead for FY2024 based on progress in the first five months.

The focus areas for Etiqa’s future growth are bancassurance and motor insurance, leveraging Maybank’s strong banking franchise.

CGS has adjusted its forecasts, raising projected dividends per share by approximately 16.6% to 62 sen-67 sen for FY2024-FY2026, and increasing the dividend discount model-based target price from RM10.60 to RM11.20.

Key downside risks include potential deterioration in Maybank’s loan growth and asset quality.

Read also:

Maybank aims to double Vietnam assets by 2027, expand investment

Maybank leads 89 Malaysian companies to make top 500 in Fortune SE Asia rankings

Maybank posts record RM2.49 bil net profit for 1Q on higher interest income, accounting gain

  • https://www.msn.com/en-my/money/topstories/cgs-reaffirms-add-on-maybank-highlights-potential-write-backs/ar-BB1pEqt5?ocid=00000000

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