Banks to be held up by resilient earnings

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Analysts say valuations of banking stocks are undemanding despite their shares having risen following the reopening of the economy.

and Alliance Bank Malaysia Bhd on its list of stock picks because of their defensive angles and firm market positioning.

“Maybank, which remains our dividend favourite , provides shelter for investors preferring more secured returns. As the market share leader in loans and deposits, Maybank would also be widely exposed to the benefits of the economy reopening,” said the research firm. Furthermore, it added that the bank has the highest CASA mix at 50%, while its fundamentals are comparatively better than larger cap peers in terms of return on equity or ROE and dividend yields .

It said sector dividend yield at 5.4% and 5.7% in FY23 and FY24 is attractive, while valuations undemanding, with the sector trading at a prospective 2023 price-to-book value of just 0.9 times for an average ROE of 10.5%.

 

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