4 Malaysian Banks to Benefit from Higher Interest Rates
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Loading... - Akira Tanaka
- 08 Feb 2023
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1.75% to 2.75%. That’s how much Malaysia’s central bank, Bank Negara Malaysia (BNM) raised its interest rate in 2022.
Two years of low-interest rates finally came to an end in May 2022, when BNM started hiking its interest rate in line with most central banks in the world.
The hot bull run before 2022 came to an end with these decisions as local inflation in Malaysia also rose to 3.3% in 2022 from 2.5% in 2021.
However, one sector in Malaysia stood to gain from these higher interest rates – the banking sector.
Banks could now charge higher interest rates on the loans that they lend out. In particular, these 4 Malaysian banks could see their profitability improve in the future…
1 Maybank
Maybank (MB) is Malaysia’s biggest financial services company in terms of market capitalization, operating mainly in Malaysia, Singapore, and Indonesia.
Maybankis mainly involved in consumer and business banking with that segment comprising about 58.4% of total net interest income. This is followed by its corporate banking and global markets division at 34.5%.
The higher interest rates since May 2022, has definitely boosted Maybank’s financial performance. Revenue grew by 13.5% and 16.7% in second quarter of 2022 (2Q 2022) and 3Q 2022 respectively. Meanwhile, profits also grew by 8.2% in the two quarters combined.
As Maybank is a favourite among investors, it currently has a HOLD call from most analysts as investors have already priced in the higher interest rates boost to their operations.
However, some upside can still be found in Maybank with the average target price at RM9.19, implying about 5.5% upside from its current share price. Read More…
