KUALA LUMPUR (Feb 8): Malayan Banking Bhd’s fourth quarter results which is due to be released at the end of the month (Feb 26) could see a risk of a slight miss in earnings target, though asset quality is expected to remain stable, said RHB Research Institute Sdn Bhd. 

In a results preview report today, RHB Research said non-interest income (Non-II) would likely be higher, as lower contractual liabilities for the insurance business would offset the expected decline in investment and trading income.

Operating expenses are also expected to rise during the quarter on booking of backdated pay, following formalisation of collective agreements for union staff in Dec 2018.

“[However] Management’s guidance suggests that our forecasts of non-II and operating expenses may have been a little too optimistic,” the research house noted.

Still, RHB Research said these would be compensated by possibly lower-than-expected loan provisions.

“Overall, we expect Maybank to post a net profit of RM2.02 billion (+3% QoQ, -5% YoY) for 4QFY18, and RM7.81 billion (+4% YoY) for FY18.

RHB Research added that the management sees uncertainty in global growth as a key concern for 2019.

“Maybank expects growth in consumer lending, albeit less robust than in previous years. Deposit competition remains keen and management indicated its readiness to raise rates when necessary,” it said.

Maybank remains one of RHB’s preferred picks for exposure to Malaysian banks. 

It reiterated its Buy call on the stock, with an unchanged target price of RM11.00.