Maybank reported another sequentially steady 3QFY24 net profit of RM2.50bn (+6.0% YoY, -1.2% QoQ), with the better performance on an annual basis aided in part by better insurance-related income. Cumulative 9MFY24 net profit of RM7.56bn (+8.5% YoY) is within our and consensus estimates at 77% and 76% of full-year numbers respectively. Operational improvements continue to be noted, amongst others the more notable regional transaction banking proposition and significantly stronger growth in the global banking mid-market segment. Earnings estimates are kept unchanged, with our dividend-based TP of RM11.40 and Trading Buy call affirmed. We like the Group's longer term prospects underpinned by its M25+ initiatives. Forward earnings multiple is still inexpensive relative to the broader market despite the healthy YTD share price gain.

• Income. Net fund-based income was higher by +1.5% YoY to RM14.66bn for 9MFY24, with a relatively stronger loans growth +7.6% YoY (which in itself was affected by the stronger Ringgit) across its home markets negated by a ~10bps compression in margins. Non-interest income growth was a robust +26.0% YoY to RM7.49bn for 9MFY24 meanwhile, on higher core fees (+13.4% YoY to RM3.33bn) and improved insurance income (+>100% to RM0.13bn). [Core fees: wealth-related, +59.0% YoY; loan-related, +45.6% YoY, advisory, +39.0% YoY; brokerage, +27.2%]
• Loans growth remained at a relatively healthy +7.6% YoY at Group level, on strong expansions across all its key markets. Business in Malaysia (+10.8% YoY) is currently driven by the mortgage (+13.3%), auto (+7.9%) and corporate banking (+14.5%) segments. Singapore (+14.5% YoY) is also supported by the corporate banking business (+16.4%) while Indonesia's (+9.7% YoY) growth is underpinned by the retail SME (+15.8%) and business banking (+26.2%) segments.
• Asset quality. Gross impaired loans ratio is lower at 1.26% (2QFY24: 1.29%) due to better recoveries and write-offs, with stable trends observed across most consumer and business lines across its key markets except for slight uptick in Malaysia's retail SME digital and consumer portfolios. Loan loss coverage remains healthy at 125.8% (2QFY24: 128.7%), with formation of newly-impaired loans also appearing under control (Figure 4, page 4). Net credit cost of 26bps remains within guidance of ~30bps for FY24.

Source: PublicInvest Research - 29 Aug 2024