Maybank cuts view on Malaysian banking sector to ‘neutral' as tariffs, slower GDP weigh on earnings
Despite the downgrade, the bank's analyst, Desmond Ch'ng, said in a note on Tuesday (Jun 3) that Maybank still recommended 'buy' calls for Public Bank, AMMB (AmBank), Hong Leong Bank, and Hong Leong Financial Group – in this order of preference –citing strong management, prudent credit buffers, and resilient fundamentals.
Disappointing performance
Overall, Ch'ng noted that the results for the first quarter of FY2025 were 'lacklustre' and that no bank surprised positively as the results of several – such as Hong Leong Bank, Hong Leong Financial Group, RHB Bank, Public Bank and Bank Islam Malaysia (BIMB) – came in below expectations.
For instance, on a quarter-on-quarter basis, Hong Leong Bank's core net profit dipped 8 per cent to RM1.1 billion (S$333.6 million), while RHB Bank saw a 10 per cent decline to RM750 million. Public Bank's core net profit fell 3 per cent to RM1.75 billion.
On BIMB, Ch'ng highlighted that the bank was falling short of its full-year return on equity target of 8 per cent, having achieved only 7.6 per cent.
That said, Ch'ng noted that Alliance Bank Malaysia, AmBank, CIMB Group Holdings (CIMB), and Maybank had results that were within consensus' expectations.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Alliance Bank's core net profit rose 6 per cent quarter-on-quarter to RM197 million for the first quarter of FY2025; AmBank's increased 6 per cent to RM514 million; CIMB posted a 10 per cent improvement to RM2 billion; and Maybank recorded a 2 per cent uptick to RM2.6 billion.
Still, sector-wide indicators point to a muted quarter.
For example, cumulative loan growth slowed to 4.4 per cent year-on-year as at end-March 2025, down from 5.5 per cent previously.
Meanwhile, net interest margins also narrowed further to 2.07 per cent, continuing a downward trend, while fee income rose just 1 per cent year-on-year, a sharp pullback from last year's double-digit growth.
Lowered GDP forecasts
In terms of GDP growth, Ch'ng said that Maybank's economics team has lowered its forecast across the region due to the widespread tariffs imposed by US President Donald Trump and heightened global economic uncertainty.
For Malaysia, Maybank has lowered its GDP growth forecast to 4.1 per cent in 2025 and 4.2 per cent in 2026, down from earlier projections of 4.9 per cent and 4.6 per cent respectively.
In comparison, Singapore's growth is now expected to come in at 2.4 per cent in 2025 – from 2.6 per cent – and 1.8 per cent in 2026.
Indonesia's 2025 growth forecast has been cut to 1.7 per cent, from 2.55 per cent previously, while the 2026 forecast remains unchanged at 4.7 per cent.
Ch'ng added that Maybank expects the US Federal Reserve to cut the Fed Funds Rate by 75 basis points in 2025, followed by a further 50 basis points in 2026.
In Malaysia, a 25-basis-point rate cut is anticipated in the second half of 2025. Meanwhile, the 3-month Singapore Overnight Rate Average is expected to moderate from 2.28 per cent currently to 1.7 per cent in 2025, and further to 1.4 per cent in 2026.
In Indonesia, the benchmark rate, currently at 5.50 per cent, is projected to fall by 25 basis points in the first half of 2025, and by another 50 basis points in 2026, bringing it to 4.75 per cent.
Taking these into account, Maybank has lowered its earnings estimates for Malaysia's banks by 5 per cent in 2025 and 4 per cent in 2026.
'Buy' picks
On its 'buy' calls, Ch'ng said Public Bank is seen as well-managed with sufficient credit buffers and rising non-interest income.
AmBank, he said, is focused on funding cost control and business banking, with potential for higher dividends.
As for Hong Leong Bank, it stands out for its strong asset quality and liquidity, while Hong Leong Financial Group provides cheaper exposure to Hong Leong Bank, albeit with lower liquidity.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
4 hours ago
- Straits Times
Under attack by Trump's tariffs, Asian countries seek out better friends
US President Donald Trump is erecting new trade barriers and demanding deep concessions from US trading partners by Aug 1. SEOUL, South Korea – For most countries that received US President Donald Trump's letters last week threatening steep tariffs, especially the Asian nations with economies focused on supplying the United States, there are no obvious substitutes as a destination for their goods. But they are doing their best to find them. Business and political leaders around the world have been roundly baffled by the White House's imposition of new duties , even as governments shuttled envoys back and forth to Washington offering new purchases and pledges of reform. Mr Trump is erecting new trade barriers and demanding deep concessions by Aug 1, claiming years of grievance because America buys more than it sells. 'Across the world, tools once used to generate growth are now wielded to pressure, isolate and contain,' Malaysian Prime Minister Anwar Ibrahim said at a gathering of South-east Asian leaders on July 9. 'As we navigate external pressures, we need to fortify our foundations. Trade among ourselves. Invest more in one another.' There are already a few signs of such efforts. South Korea's new president, Lee Jae Myung, sent special envoys to Australia and Germany to discuss defence and trade issues, and plans on dispatching delegations to several others. Brazil and India announced plans to increase their bilateral trade by 70 per cent, to US$20 billion (S$26 billion). Indonesia says it is nearing a treaty with the European Union that would drop most tariffs on both sides to zero. And in Vietnam, which Mr Trump said had accepted 20 per cent tariffs on its goods headed to the United States before last week's letters, the deputy trade minister emphasised efforts to reduce her country's reliance on American consumers by leveraging other trade agreements. 'As more and more countries are feeling that it's more difficult to satisfy US demands, then their interest in working with others is going to intensify,' said Ms Wendy Cutler, vice-president at the Asia Society Policy Institute. Top stories Swipe. Select. Stay informed. Singapore Govt will continue to support families, including growing group of seniors: PM Wong at PCF Family Day Singapore From Normal stream to Parliament: 3 Singapore politicians share their journeys World Deal or no deal? EU faces critical decision in response to Trump's latest tariff salvo Singapore Segregated recycling bins found to lower contamination rate as more spring up Sport Two participants injured after another breached safety protocol during Pesta Sukan archery event Asia Mahathir discharged from hospital after feeling fatigued during birthday gathering Singapore Medics treat 7 after blaze at HDB block lift lobby in Chai Chee Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons There is plenty of precedent for countries to seek other partners when their long-standing relationships sour. During Mr Trump's first term, China retaliated against US tariffs by buying smaller amounts of US soybeans. Brazil filled the hole and now supplies most of China's soybean demand, leaving American farmers with too much product and not enough buyers. In 2017, China boycotted goods from South Korea in retaliation for its willingness to host an American antiballistic missile system, seriously damaging South Korea's China-dependent consumer and tourism industries. In response, South Korea expanded trade and investment with Indonesia, Malaysia and Vietnam. Since Asian nations had already been working to diversify their customer bases, the current drive is not entirely new. But the region is still far from seamlessly integrated. South Korea, for example, has resisted joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade pact that rose from the ashes of negotiations with the United States that foundered in 2016. Mr Byung-il Choi, a South Korean economist and former trade negotiator, has been urging his country to join that agreement, which its neighbour Japan has signed. New hostility from Washington may finally make it possible, and South Korea's president, Mr Lee, has been more amenable to Japan than many expected during his campaign. 'Japan and Korea believed that we are a staunch, ironclad ally of the US, but Donald Trump doesn't believe in allies,' Mr Choi said. 'So Japan is anxious to get more significant members, and Korea's incoming government is saying, 'In the name of national interest, we could do anything.'' The latest tariff barrage has arrived as China has also been flooding the world with cheap goods to sustain its export-based growth. That oversupply of cars, appliances, electronics and textiles makes it harder for China's neighbours to find their own niches. Some of them could benefit from the Trump administration's determination to prevent Chinese goods from filtering through other countries to American ports. Chinese businesses have already been setting up factories in South-east Asia in search of lower labour costs, and the new agreements may encourage them to locate more of their supply chain outside China as well. Companies in the region, squeezed by competition from China and now by tariffs, could work to improve their productivity and maintain market share. 'They can do more efficiencies, maybe investing in new technology, digitalising some of their factories, in order to reduce costs,' said Mr Dionisius Narjoko, a senior economist at the Economic Research Institute for Asean and East Asia. 'It could be cheaper to export, and therefore they can become more competitive in new markets or even in the US.' To increase their citizens' incomes, developing nations in South-east Asia still need to create more homegrown enterprises. It's not enough to remain the workshop for major powers. That requires steady leadership and focused investment, of the sort that allowed South Korea and Japan to grow into manufacturing powerhouses. For example, while mostly Japanese companies now produce more than 1 million cars a year in Thailand, and South Korean giant Samsung makes many of its cellphones in Vietnam, those South-east Asian countries remain relatively poor. 'They need to internalise some industrial technology from the foreign direct investment,' said Dr Kim Dongsoo, a senior research fellow with the Korea Institute for Industrial Economics and Trade. 'Everybody knows that's kind of a problem, but not all governments can escape from that trap.' Ultimately, it could be advantageous for the countries that have become the targets of Mr Trump's tariff campaign to come up with a more collective response. So far, that hasn't happened, as world leaders have continued to try to secure more favourable treatment for their own countries. Even the growing Brics alliance, which drew Mr Trump's ire as it met in Rio de Janeiro and welcomed Indonesia as an official member, stopped short of taking any action to resist US tariffs. 'I haven't seen indications that South-east Asian nations are trying to join together and present a united front,' said Dr Alexander Hynd, an assistant professor at the University of Melbourne's Asia Institute. But that could change if the current pace of upheaval continues. 'The US is fairly rapidly attempting to dismantle the system that it set up, which is surprising a lot of people,' Dr Hynd said. NYTIMES
Straits Times
13 hours ago
- Straits Times
Known for its KL Foodie platform, parent company Foodie Media plans IPO on Bursa Malaysia
Sign up now: Get ST's newsletters delivered to your inbox Mr Nicholas Lim Pinn Yang, who co-founded Foodie Media with wife Ang Rui Mei in 2018, aims to raise capital by listing on the ACE Market of Bursa Malaysia. KUALA LUMPUR – As a young boy, Foodie Media's head honcho Nicholas Lim Pinn Yang would wake up early and accompany his father, a frying-pan salesman, to the bustling local markets. Seeing his father's lively product demonstrations and interacting with customers taught him the art of selling, sparking an entrepreneurial spirit that nudged him toward a path that involved talking up good food. 'My father understood the importance of live demonstrations. To show the advantages of non-stick pans, he would fry popcorn for the kids while also showing that fish wouldn't stick in another pan, to attract the aunties. 'Now, with the rise of social media, thousands of people can watch online. It's a big leap from the 20 or so shoppers who used to watch my father's demos,' Mr Lim told The Straits Times at his office in Bangsar on July 9. Penangite Mr Lim, 32, has come a long way since: From a humble food blogger offering free reviews nearly 10 years ago to co-founder and chief executive officer of a digital media company with online content that's amassed 40 million followers on social media – chalking up a net profit of RM7.45 million (S$2.24 million) on revenue of RM23.95 million for its latest financial year. Set up in 2018, Foodie Media, with 70 employees, is mainly involved in the digital media publishing sector, where it creates, produces and distributes content across established social media platforms including Facebook, TikTok, Threads, X, Instagram, YouTube, Douyin, RedNote, WhatsApp and blogs. In addition to top 'foodie' platforms like KL Foodie and Penang Foodie, it manages 34 lifestyle-focused brands in South-east Asia, covering a wide range of topics beyond food and beverage to travel, leisure, lifestyle, property and sports. Next up: Going public. Foodie Media wants to raise funds through an initial public offering (IPO) on the local stock exchange Bursa Malaysia, to increase its workforce and acquire a livestreaming building, among other plans. It filed on June 23 to list on the ACE Market for emerging companies , offering 250 million shares or 28.15 per cent of the company's enlarged issued share capital. The IPO is touted as a first in terms of food-related content for a Malaysian digital media company, and will join established listed players in the sector such as Star Media Group and Catcha Digital , and Rev Digital, a subsidiary of listed Media Prima . Star Media Group controls The Star newspaper and two radio, while Catcha Media operates social media portals. Media Prima is the country's biggest integrated media group with television station and newspaper assets. Top stories Swipe. Select. Stay informed. Singapore Government looking at enhancing laws around vaping to tackle issue of drug-laced vapes in Singapore Singapore Why the vape scourge in Singapore concerns everyone Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons Singapore Organised crime groups pushing drug-laced vapes in Asia including Singapore: UN Singapore Govt will continue to support families, including growing group of seniors: PM Wong at PCF Family Day Singapore From Normal stream to Parliament: 3 Singapore politicians share their journeys Business 29 Jollibean workers get help from MOM, other agencies, over unpaid salaries Asia Why China's high-end hotels are setting up food stalls outside their doors In the beginning, Mr Lim ventured into the world of food-writing by launching the Penang Foodie blog in 2016, with one of the earliest free F&B reviews on the island widely known as Malaysia's foodie paradise. Subsequently, recommendations for 'Penang's Best Breakfast' and the island's 'Top 10 Nasi Kandar' stalls gradually grew followers for the blog to 1,000 on Facebook in the first year. The rise of short videos was a pivotal moment for Mr Lim and his team in 2018. Turning blog articles into video slideshows was a hit. The first slideshow, 'Top 10 Street Foods in Penang,' garnered 15,000 shares on Facebook, far surpassing the 300 shares typically seen for written reviews. That gave Mr Lim the confidence to shoot his first outdoor video, featuring a burger stall, without charging the owners for the effort and resulting publicity. ' I was hesitant to appear on camera but we still went ahead. A day after the video was published, it received over 20,000 views, and there was a long queue at the burger stall,' he recalled. 'I'm happy to provide value for clients, support small and medium enterprises (SME), and grow our followers.' Now, he aims to ride the wave of growing online advertisement space versus traditional media. Foodie Media has benefited from the digital media advertising boom in Malaysia. The compound annual growth rate (CAGR) of digital media advertising rose by 11 per cent from 2019 to 2023, reaching RM2.37 billion, according to the IPO prospectus. In contrast, traditional media recorded a negative CAGR of 0.2 per cent over the same period, despite reaching a value of RM5.1 billion in 2023. Despite the economic downturn caused by Covid-19, Mr Lim managed to keep his team intact by earning affiliate income through e-commerce platforms. The recurring Malaysian food content not only helped ease the homesickness of sojourners but also increased followers on social media by 40 per cent between 2020 and 2022, said Mr Lim. In the pipeline, ideas are brewing for fresh content which drives website traffic and increases user engagement. A new series, titled Cooking for Colleagues, landed in May 2025. Episode 1: Fillet-O-Fish, a one-minute clip, has gotten more than 6,000 likes in the first month on Instagram. The company is also moving into livestream sales and trying its hand at producing and distributing drama shorts, said Mr Lim. In Malaysia, livestream sales are thriving, as leading e-commerce platform Shopee's numbers show. At the end of 2023, over one million Malaysians had registered to stream on Shopee Live, a livestream platform on the app that lets viewers watch product-related content and interact directly with sellers. That year, 80,000 sellers boosted earnings by 25 per cent from the previous year, while livestream orders grew 500 per cent over the same period. Popular Malaysian food influencer and entrepreneur Khairul Aming credited 70 per cent of his sales, or RM42 million, in 2024 from livestreaming two bestselling Kelantanese food products , Dendeng Nyet Berapi (spiced beef jerky) and Sambal Nyet (dry sambal or chili paste) . Micro-dramas , or short-form video series typically spanning one to two minutes per episode, could also fill a gap in a potentially lucrative market, given today's shorter attention spans. 'In the past, we used to sit down with our parents to watch TV at 8pm, but now audiences are shifting to ultra-short dramas,' noted Mr Lim. 'We recently collaborated with a third-party video production house to promote the China-based milk tea brand Chagee through a short drama titled Di Sebalik Permata (Behind the Gem) .' The Economist estimates the market for these micro-dramas could reach a valuation of US$14 billion in China alone by 2027. But Foodie Media will continue to rely on culinary storytelling to engage its followers – as seen in its organic or ad-free content featuring TBX The Baking Xperiment café in Subang, Selangor, interviewed by KL Foodie on July 4. The café's new recipe, Tapai Tiramisu – made with fermented rice – garnered 623,000 views on social media as of July 11. For Mr Lim, the advent and rise of digital media enables street vendors and SMEs to overcome the physical limitations his father once faced. 'When it rained, I felt sorry for my dad as he couldn't run his stall without sales (because there were fewer customers due to bad weather) . Now, with online markets, the sky is the limit.'
Business Times
14 hours ago
- Business Times
Singapore's first home launch since new curbs sells over 90%
[SINGAPORE] Singapore's first mass-market private residential project launched since new curbs were introduced saw the development almost sold out as homes were sold at lower-than-usual prices. The LyndenWoods development sold 324 units on Saturday (Jul 12), the first day it started to accept bookings, CapitaLand Development said in a statement the same evening. That's about 94 per cent of the 343 units to be built at a business park in the city's south. The launch came over a week after the introduction of surprise measures targeting speculators in the property market. Owners must now hold their homes for at least four years if they want to avoid paying a seller's tax, from three previously, while those who still choose to do so face higher levies than before. CapitaLand Development – part of CapitaLand Group that's owned by Singapore state investor Temasek Holdings – said LyndenWoods homes were sold at an average price of S$2,450 per square foot to mainly professionals, couples and families who were attracted by its long-term investment potential. That's lower than median rates for similar units across Singapore and the district. Another project about a mile away has sold less than half of its 358 units after its launch earlier this year. The early performance may validate policymakers' concerns about a trend of flipping properties for a quick profit, which had driven a renewed jump in home prices and risked affecting affordability in one of the world's most expensive residential markets. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Private home prices grew for a third straight quarter in the three months ended June, although the pace slowed to 0.5 per cent, preliminary data show. Not all projects have outperformed. High-end homes in the central business district have struggled since seperate curbs in 2023 raised levies on foreigner purchases, and the projects have been less popular among local buyers due to relatively higher pricing and a lack of amenities. One such luxury project boasting over 680 units, W Residences Marina View, was also slated to accept bookings on Saturday. IOI Properties Group, its Malaysian developer, has not publicly released data on its performance. More projects are lined up for sale in coming weeks, and may give further clues of how buyers are digesting the measures. The opening sales weekend for private projects usually sees the bulk of transactions, and is closely watched for an indication of market sentiment. BLOOMBERG
