PETALING JAYA: Malayan Banking Bhd
’s (Maybank) operations in Indonesia remain a central pillar of its Asean strategy, despite being its lowest-returning market with an annualised return on equity (ROE) of 3.94% in the first quarter of 2026 (1Q26), compared with the group’s 11.2% ROE.
In order to address this, Malaysia’s largest banking group is undergoing a deliberate portfolio rebalancing, exiting underperforming segments like commodities and low-margin sovereign-linked lending to focus on “network names” – specifically Malaysian and Singaporean corporations expanding into Indonesia – to drive higher-margin, relationship-based banking, CIMB Research noted in a report following the Invest Malaysia 2026 conference recently.
The bank is expecting to launch a new mobile banking platform in 1Q27 to bolster its retail and digital capabilities.
CIMB Research noted Maybank’s wealth management business has emerged as a significant driver for non-interest income, posting 36% year-on-year growth with Singapore as the primary contributor, generating over 50% of group wealth income due to high-net-worth inflows from China and the Middle East.
“Although most ultra-high-net-worth assets remain booked offshore (primarily in Singapore), Maybank sees potential to develop onshore and Islamic wealth propositions (for both Malaysia and Indonesia) as the domestic affluent base expands,” the CIMB Research report on Maybank said yesterday.
The research house maintained its “hold” rating on Maybank with an unchanged target price of RM10.50 a share.
CIMB Research added that Maybank had successfully expanded its net interest margin to 2.14% in 1Q26 by replacing high-cost fixed deposits with lower-cost wholesale funding.
However, loan growth is expected to moderate toward the lower end of the 4% to 5% guidance as the bank prioritises “total relationship” returns over volume.
CIMB Research noted Maybank’s asset quality remained resilient with gross impaired loans ratio saw only a slight uptick to 1.34%.
It added that Maybank’s premium valuation is justified by its scale, regional diversification and attractive dividend yields exceeding 6%.
Maybank’s core net profit is projected to grow steadily from RM10.5bil in 2025 to RM11.6bil by 2028.
Future re-rating of the stock will depend on clearer evidence of sustainable ROE expansion toward its 13% to 14% range.