This article first appeared in The Edge Malaysia Weekly on April 7, 2025 - April 13, 2025

MALAYAN Banking Bhd (KL:MAYBANK) president and group CEO Datuk Khairussaleh Ramli’s contract has been extended by another three years, sources say. The extension allows him to see through the bank’s ongoing corporate strategy — known as M25+ — which ends this year, and to craft a new mid-term strategy for the next few years.

This would be the second term for Khairussaleh at the country’s largest banking group by assets. He took the group’s helm on May 1, 2022, succeeding Tan Sri Abdul Farid Alias who stepped down after almost nine years in the position.

Khairussaleh, who is 58 this year, was previously the group managing director/CEO of RHB Bank Bhd (KL:RHBBANK) for some seven years.

Maybank declined to comment when contacted.

The group, which saw a 1.7% year on year (y-o-y) decline in net profit to RM7.96 billion in the financial year ended Dec 31, 2022 (FY2022), managed to grow its earnings over the subsequent two years. Net profit expanded by 17.4% to RM9.35 billion in FY2023 and by 7.9% to RM10.09 billion in FY2024, which was a record high.

Its return on equity (ROE) improved from 9.6% in FY2022 to 10.8% in FY2023 and 11.1% in FY2024.

Analysts note that Maybank is on track to achieve its ROE target of 11% to 12% this year, as set out under its M25+ strategy.

While its financial performance has improved, the bank came under investor scrutiny two months ago when it announced the unexpected and immediate departure of its group chief financial officer Khalijah Ismail. In a stock exchange filing on Feb 17, it said her departure followed “an internal inquiry by the bank” but did not provide details.

It later told analysts that Khalijah’s termination was due to non-compliance with its internal requirements and processes but did not elaborate. It, however, made clear that there were no financial losses suffered from this development.

Nevertheless, some analysts felt the removal of a key executive raises some concerns about Maybank’s governance standards.

The Edge understands that Khalijah, who categorically denies any wrongdoing, has since initiated legal action against the bank.

“We are unable to comment due to confidentiality of employment matters,” a Maybank spokesperson said last Friday in response to an email from The Edge seeking an update on the matter and on Khairussaleh’s contract extension.

On a separate matter, the bank reveals that it will start moving employees to its new corporate headquarters at the Merdeka 118 building in Kuala Lumpur — the world’s second-tallest skyscraper — in the second quarter of next year. Its current headquarters is Menara Maybank in Jalan Tun Perak, Kuala Lumpur.

“Maybank is expected to be moving to Menara Merdeka 118 in stages beginning 2QFY2026,” the spokesperson said.

Maybank had first announced the relocation plans in 2022. In an interview with The Edge in the last quarter of 2024, Khairussaleh had said the move to the Permodalan Nasional Bhd (PNB)-owned Merdeka 118 would be delayed to “sometime in 2026” as it had only just obtained the Certificate of Completion and Compliance.

The group, whose biggest shareholder is PNB, had initially hoped to move early this year.

Occupying 33 floors, Maybank is set to be the building’s single biggest tenant, which gives it naming rights. 

Maybank’s share price has gained 12.8% over the last year to close at RM10.24 last Friday, giving the lender a market value of RM123.7 billion. It remains the largest public-listed company on Bursa Malaysia.

For comparison, the next largest banks by assets CIMB Group Holdings Bhd (KL:CIMB) and Public Bank Bhd (KL:PBBANK) had market values of RM75.26 billion and RM84.82 billion, respectively.

According to Bloomberg data, 13 analysts have a “buy” call on Maybank while six have a “hold” and two, a “sell”. The average 12-month target price was RM11.52, which suggests further upside from its closing price of RM10.24 last Friday.

Kenanga Research cites Maybank as its top stock pick among large-cap banks.

“We like Maybank as, despite its leading market share, it holds better-than-industry asset quality, with earnings growth expected to outpace its counterparts,” it says in a March 5 report on the sector. It has an “outperform” call on the stock and a target price of RM12.

Maybank’s gross impaired loans ratio, a measure of asset quality, improved to 1.23% in FY2024 from 1.34% a year earlier. 

Maybank’s record earnings in FY2024 were underpinned by a solid 20.4% increase in non-interest income and an 8.5% drop in loan loss provisioning. Its dividends that year came up to 61 sen per share, which represented a payout ratio of 73%, entirely in cash.

“The negative take for FY2024 was the weak net interest income, which barely grew by 0.1% [that year], on the back of loan growth of 5.3%. However, we have observed signs of recovery in 4Q24, as net interest income increased by a healthy 5.3% y-o-y, the first y-o-y growth in the past two years. We think that this could have resulted from greater discipline in its pricing of loans and deposits and initiatives to manage its net interest margin (NIM),” CGS International says in a Feb 27 report following the bank’s FY2024 results.

The research house projects a net profit growth of 7.9% for Maybank in FY2025, driven mainly by an estimated 7.9% increase in net interest income and a 4% decline in loan loss provisioning.

“We reiterate our ‘add’ call on Maybank in view of the potential write-backs of its management overlay (which stood at RM1.7 billion at end-Dec 2024) and recovery in net interest income growth. The stock is also supported by attractive dividend yields of 6% for FY2025F,” it says. It has an RM12.80 target price on Maybank.

Meanwhile, UOB Kay Hian Research has a “hold” call on the stock. “Looking ahead, we expect non-interest income growth to taper off while NIM could start to stabilise. We maintain a “hold” on Maybank and a target price of RM10.56 (1.18 times FY25 price-to-book value, 10.2% ROE). The stock is trading at the mean price to book value, which we deem fair given its modest earnings growth expectation of 3%, while the current dividend yield of 6% is also comparable with historical levels,” it says in a Feb 27 report. 

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