It said on Tuesday the additional business volume and cost savings (for banks) would be largely offset by the expected drop in transaction rates and potential loss of market share to new fintech companies.
“We believe the potential winners would be the first movers (including Maybank) that started investing in this segment earlier than other banks.
“We retain our FY17-19F EPS forecasts but raise our DDM-based target price (TP) from RM8.90 to RM9.05 as we roll over TP basis to end-FY18F,” it said.
CIMB Research thinks there will be tremendous growth opportunities in digital banking, in line with the projected swift expansion of e-commerce transactions (16 times by 2025F in Asean).
It said Maybank achieved strong growth in digital banking in 2016, with a 35% jump in total number of monetary transactions and 34% increase in total number of active users.
“Raise dividend discount model-based target price from RM8.90 to RM9.05 as we roll over to end-FY18F. Maintain Hold due to high current valuation, with FY18F P/E above historical five-year average,” it added.
CIMB Research is positive on Permodalan Nasional Bhd’s plan to introduce Islamic shares for Maybank.
“However, we think that this is already priced in, given Maybank’s current high valuation and hence, we maintain our Hold call on the stock.
“Maybank is currently trading at FY18F P/E of 12.6 times, above its historical five-year average of 11.2 times. The upside/downside risks to our call are a pick-up/slowdown in loan and fee income growth, as well as expansion/contraction in net interest margin,” it said.