KUALA LUMPUR (Feb 23): Malayan Banking Bhd (KL:MAYBANK) will likely report strong earnings in the final quarter of 2025, riding on tailwinds from market gains and lending margin recovery, an analyst said.

Higher foreign investments and portfolio inflows suggest better liquidity that will boost flow income for Malaysia’s largest bank by assets from stronger currency conversion and hedging activity, CIMB Securities said in a note. The buying of Malaysian government bonds could also bolster investment gains, it noted.

“This turn in liquidity conditions should reinforce tailwinds for Maybank, given its relatively higher exposure to regional flows,” the research house said.

Maybank derives about 70% of its pre-tax profits from Malaysia though the company also counts Singapore and Indonesia as its home markets. About one-third of its income is from non-interest income, such as service charges and trading gains.

CIMB Securities, now one of the most bullish analysts on Maybank, raised its target price to RM13.30 from RM10.50 and maintained its 'buy' call ahead of its results announcement on Thursday (Feb 19).

Maybank may deliver a net profit of RM2.83 billion in the fourth quarter, up 8.1% quarter-on-quarter and 11.9% year-on-year, according to CIMB Securities’ estimates. On a full-year basis, the company could report a core net profit of RM10.67 billion, or 88.4 sen per share.

Meanwhile, the combination of a stronger ringgit and improved domestic liquidity has eased the funding cost pressures for Maybank, the research house said.

All in all, the developments are positive for Maybank’s net interest margin, CIMB Securities said.

The net interest margin — a measure of profitability from interest charged on loans after deducting returns paid to depositors — could expand by about four to five basis points to 2.06% in the fourth quarter but moderate two basis points to 2.03% on a full-year basis, the house added.