Sharing from remisier.

$MAYBANK / 1155 (MALAYAN BANKING BERHAD) drama

-

*Maybank* (RM10.56) - *Updates on briefing*

Maybank terminated the employment of CFO, Pn Khalijah Ismail due to findings of non-compliance of their own internal requirement and process.

She underwent a normal investigation process, which applies to all employees and Dato’ Khairussaleh was not involved.

Few key things to take note:
(i) there were no falsification of accounts and financials stay true and fair,

(ii) no financial losses from this event, and

(iii) the internal inquiry was not triggered by any enforcement of law agency.

Management said this was an isolated case and controls are in place to safeguard shareholders’ interests.

Jit notes that management has provided some clarity on the matter, but he reckons share price could still likely see a knee jerk reaction.

Also, he does not discount the possibility of a short-term overhang on its share price.

That said, he re-iterates its capital and financial strengths, along with its ESG leadership in the banking space, remains valid.

Jit suggests for those who are looking to bottom-fish (in the event of a selldown), RM9.50-9.60 seems to be a good entry range, given its 38% Fibonnaci retracement level.

At this point, the dividend yield is close to 7% and could provide good support to share price.

Jit does not expect significant foreign selling pressure on Maybank, seeing its status as the least preferred large cap bank within his coverage, with foreign shareholding level <20% (lowest).

Aside from buying Maybank on weakness (if any), Jit suggests to re-visit his top picks:
*Public* (TP: RM5.20) and
*RHBBank* (TP: RM7.55).

Jit likes Public for its:
(i) strong defensive qualities,
(ii) headroom for provision write-backs, and
(iii) foreign shareholding is near multi-year low.

He likes RHB for its:
(i) appealing dividend yield of >6%,
(ii) being a relatively undemanding KLCI banking component, and
(iii) elevated CET1 ratio (>16%).

To sum up, Jit has a BUY rating on Maybank with a TP of RM11.35, based on 1.33x FY26 P/B. This is broadly in line with its 5-year pre-pandemic average of 1.27x (similar ROE output vs 2015-19 level) but above sector’s 0.94x (the premium is warranted given its regional exposure, leadership position, and higher dividend yield).