Maybank gets continued boost from Indonesian unit

KUALA LUMPUR: Malayan Banking Bhd’s (Maybank) Indonesian unit PT Bank Maybank Indonesia Tbk will continue to provide a boost to the group’s results, said MIDF Research.

The research house said it was pleasantly surprised by the decline in interest expense despite lower current and savings accounts in Maybank Indonesia’s results for the first six months of FY17.

Maybank Indonesia posted a net profit growth of 16.3% year-on-year to 998.5 billion rupiah (RM320.75 million) due to strong net interest income (NII) growth and lower provisions.

“Taking all into consideration, we are optimistic on the group’s prospect for the rest of FY17 given that we expect lower provisions and the potential to maintain momentum of loans growth and quality deposits growth,” MIDF said in a report.

NII growth of 7% came mainly from better funding management. MIDF believed this was due to better funding cost management given that interest income was flattish.

“Pending the announcement of the group’s Q2’17 result, we make no change to our forecast for now.

“While the expected total return is currently below our threshold of +15%, we are making an exception in this case pending for the group’s (Q2’17) result.”

For now, MIDF maintained its “buy” call on Maybank with an unchanged target price of RM10.30.

Maybank shares closed unchanged at RM9.64 on Friday, on volume of 4.42 million units traded.