KUALA LUMPUR, March 27 — Research houses maintain a positive stance on Malayan Banking Bhd (Maybank) after learning more on its Group Community Financial Services (GCFS) business along with the strategy installed for the respective segments.

In a note today, Hong Leong Investment Bank Bhd (HLIB) has maintained a Hold stance on Maybank with a target price (TP) of RM8.90 as it believed the bank would continue to thrive in this space.

Last Friday, Maybank held an Investor Day to provide more insight into its GCFS.

The research house highlighted that GCFS is an important business segment as it generated 59 per cent of Maybank’s revenue and 53 per cent of pre-provision operating profit (PPOP).

"From financial year (FY) 2018 to 2022, we saw that both top-line and PPOP grew by a commendable compound annual growth rate (CAGR) of 5 to 6 per cent.

"The good showings were backed by robust loans and deposits CAGR of 4 to 5 per cent during the four years. Furthermore, the GCFS makes up 60 to 66 per cent of total loans and deposits. Hence, Maybank looks to double down on its GCFS franchise to fuel its next leg of growth,” it shared.

HLIB also shared that the strategy for the GCFS is to accelerate core portfolio growth across key markets through customer-centric propositions, redefining non-retail segment limits, expanding dedicated sales force, and tapping on cross-sector-border synergies.

The GCFS is also strategised for continuous pursuit of operational excellence, regionalise core digital services and platforms, coupled with upholding asset quality via proactive management discipline in credit origination whereby these will be driven by its strategic programmes under the M25+ game plan, HLIB said.

Meanwhile, RHB Research has maintained a Buy call on Maybank and upgraded its TP by 15 per cent to RM9.65 per share.

"The GCFS focuses on enhancing customer experience and journey with ecosystems as well as digital could well be the key differentiator proposition for the group. In a volatile market, its attractive dividend yield should be the key driver of shareholder returns in our view,” it noted.

The research house also noted that the GCFS division is the group’s largest segment, with the 2022 mix for revenue, loans and deposits at 59 per cent, 66 per cent and 60 per cent respectively.

Mortgages (45 per cent share) and auto (20 per cent) are the largest loan segments while Malaysia (74 per cent), Singapore (12 per cent) and Indonesia (12 per cent) are the largest contributors to revenue. The GCFS current account saving account (CASA) is strong (with 52 per cent CASA mix).

In 2022, RHB Research said GCFS loans and deposits rose seven per cent and three per cent year-on-year (y-o-y), while revenue was up 17 per cent y-o-y.

"Maybank highlighted the increasing importance of digital as a differentiator. Its Maybank Home2u is the country’s first-ever digital home financing solution where approval can be obtained within 10 seconds of completing an application. RM1.1 billion in mortgages have been approved thus far,” it added. — Bernama