PETALING JAYA: Malayan Banking Bhd

’s (Maybank) dividend prospects are expected to remain healthy, supported by sustainable capital generation and potentially higher dividend upstreaming from key subsidiaries.

This includes Maybank Ageas Holdings Bhd post-acquisition, according to Hong Leong Investment Bank Research.

Maybank Ageas is the holding company for Etiqa businesses in Malaysia and Singapore and Maybank is in the midst of acquiring the remaining 30.95% stake it does not own in Maybank Ageas.

Quoting Maybank management, RHB Research said the dividend reinvestment plan or DRP is in place for just 2026 to help rebuild some capital, post the Etiqa transaction.

The DRP offers Maybank shareholders the choice of receiving their dividends entirely in cash, or to reinvest the electable portion of their dividends into new Maybank ordinary shares.

Maybank recently declared a first interim dividend of 31 sen per share for the financial year of 2026 (FY26), of which five sen is electable under the DRP.

In a separate note, CGS International (CGSI) Research said it has raised the FY26 to FY28 net profit forecasts by 1% to 2% to factor in Maybank’s proposed acquisition of the remaining 31% stake in Maybank Ageas.

“This leads to an increase in our target price from RM15 to RM15.20 (cost of equity: 9.4%, terminal growth rate: 4%).

“We maintain our ‘add’ rating on Maybank due to its attractive dividend yield of 6.1% for FY26.

“Potential re-rating catalysts would be higher net interest margin (NIM) in FY26, and net profit accretion from its proposed purchase of the remaining stake in Maybank Ageas,” the research house said.

CGSI Research noted that Maybank further increased its management overlay by RM300mil in the first half of FY26 (1H26) to RM2.6bil as at end-June 2026.

“We are positive on this preemptive move to increase its buffer against any heightened credit risks from elevated oil prices.

“Excluding the management overlay, 1H26 net profit would have increased by 3.5% year-on-year (y-o-y), by our estimate, instead of the 0.9% y-o-y drop recorded.

“We estimate that every 10% writeback in future management overlay would enhance its FY26 to FY27 net profit by 1.6% to 1.8%,” said the research house.

Meanwhile, TA Research said Maybank’s 1H26 results were broadly in line with expectations even as net profit edged down 0.9% y-o-y, weighed down by a 5.1% y-o-y decline in net operating income.

It pointed out that Maybank’s several key indicators, including the cost-to-income ratio and loan growth, are trailing management’s FY26 guidance. Annualised return on equity (ROE) came in at 11.6%, slightly short of the group’s target to exceed 11.8%.

“With stronger second-quarter momentum lifting overall 1H26 results, management is maintaining the FY26 guidance despite previously flagging potential downside risks to loan growth (4% to 5%) and ROE (over 11.8%).”