Investment Highlights

• We maintain our HOLD call on Malayan Banking (Maybank) with an unchanged fair value (FV) of RM9.50/share. Our FV is pegged to P/BV of 1.2x supported by FY24F ROE of 10.8%. Our 4-star ESG rating has been maintained, resulting in a 3% premium to our FV on the stock.

• We made no changes to our earnings forecast.

• The group held an investor day yesterday to update on its focus and progress on digital banking.

• We gather that the group will leverage on ecosystems to increase the penetration of banking solutions and services digitally to grow its market share in ASEAN markets. Through digitalisation efforts, Maybank has increased the number of active digital customers. It now has more than 8.7mil active users. Also, the group has grown the opening of CASA digitally by more than 69x (from 2018 to Sept 2023).

• For Maybank, digital banking will not operate as a separate business division but as part of its core business with an agile way of working. By enhancing productivity, the increase in digitalisation across products and services is poised to gradually increase its sales and revenue.

• Presently, the group commands a leading market share in digital banking in Malaysia. On mobile/internet banking transaction volume, Maybank has a market share of 50.9%/56.1% as of Sept 2023. Meanwhile, for Duitnow QR Pay, the group’s market share stood at 54% as of Apr 2023.

• As of end Sept 2023, the group has achieved a digital customer penetration rate of 74.1% vs. 73.6% in 2022 (target: >80% by 2025).

• In terms of digital sales, the overall penetration rate has risen to 77.7% in Sept 2023 from 67.2% in 2022. The group is hopeful of increasing it to 85% by 2025. Digital users’ average total revenue was higher than that of the non-digital users.

• Digital users of Maybank have higher number of CASA accounts, loans and larger total financial assets.

Source: AmInvest Research - 15 Nov 2023