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Issuer Credit Research

Issuer Flash: Maybank

Issuer Flash: Maybank

Report date: 2026-05-29 Event date: 2026-05-28 Event title: Q1 FY2026 Results

1. Flash Conclusion

Maybank’s results for the January–March 2026 quarter do not materially change the credit view in the latest issuer summary. The assessment of Maybank as a defensively positioned bank credit, supported by its deposit franchise, net interest margin (NIM), capital, and liquidity, remains intact. However, some caution is warranted in extrapolating the low credit cost and capital accumulation seen in FY2025 on a straight-line basis.

Net profit attributable to equity holders of the parent declined 4.2% year on year to RM2.48bn. The main driver of the earnings decline was weaker non-interest income, including market-related income and mark-to-market effects; it does not indicate a sudden deterioration in the deposit base or credit franchise. NIM was 2.14%, and the CASA ratio was strong at 41.1%. At the same time, the gross impaired loans ratio moved to 1.34%, and loan loss allowance coverage moved to 104.4%, indicating that asset quality is not improving in a straight line.

For senior debt, the read-through is neutral to modestly positive. Low-cost deposits and NIM improvement reinforce confidence in the funding profile. For subordinated debt and AT1, however, the decline in the group CET1 ratio under the same presentation basis in the 1Q FY2026 Bursa attachment, from 16.041% at end-December 2025 to 14.956% at end-March 2026, should be monitored. This should not be compared mechanically with the headline FY2025 metrics in the latest summary, as the presentation basis differs.

2. What Was Announced

On 2026-05-28, Maybank announced its unaudited results for the first quarter ended 2026-03-31. Quarterly net profit was RM2.55bn, net profit attributable to equity holders of the parent was RM2.48bn, and profit before tax was RM3.29bn.

Net fund-based income and income from Islamic banking operations increased year on year to RM5.45bn, while other operating income declined to RM1.11bn. The company explained that the results were weighed down by mark-to-market losses on financial investments, lower foreign exchange gains, and impairment losses on financial assets. The cost-to-income ratio worsened to 49.9%, from 48.5% in the prior-year period.

Net allowance for impairment losses on loans, advances, financing and other debts increased 26.2% year on year to RM484.7mn, but the net credit charge-off rate remained low at 10bp. Gross impaired loans increased from RM8.81bn to RM9.20bn. Under the Bursa attachment’s presentation “before deducting the electable portion of the dividend,” the group CET1 ratio was 14.956%, and the total capital ratio was 18.469%.

3. Credit Read-Through

The positive point is that the deposit and funding profile has not weakened. NIM improved to 2.14%, and the CASA ratio remained high at 41.1%. 1Q FY2026 does not undermine the foundation of the latest summary: a bank defended by its deposit franchise, Islamic finance platform, ASEAN customer touchpoints, capital, and liquidity.

The decline in earnings does not need to be read as credit deterioration. Quarterly profit was largely affected by volatility in market-related income and mark-to-market effects. However, together with the deterioration in the cost-to-income ratio, the earnings picture is less smooth than in FY2025 as a whole.

Asset quality is the most important area to verify. In the amortised-cost category for loans, advances, financing and other debts, Stage 2 allowances increased from RM3.41bn at end-December 2025 to RM3.49bn at end-March 2026, while Stage 3 allowances increased from RM3.15bn to RM3.33bn. The levels remain sound and are not sufficient to undermine the credit story, but FY2025’s low credit cost should not be extrapolated mechanically.

Capital remains strong. This is not a major concern for senior debt, but for AT1 and Tier 2 instruments, the view of capital buffers could change if lower NIM, higher credit cost, sustained dividends, and growth in risk-weighted assets occur at the same time. The current results are less an event of realised risk than an event that clarifies the items to verify in subsequent quarters.

4. Key Numbers

Metric 1Q FY2026 / End-March 2026 Comparator Credit read-through
Net profit attributable to equity holders of the parent RM2.48bn YoY -4.2% Mainly driven by market-related and mark-to-market effects; not read as immediate credit deterioration.
NIM 2.14% 2.04% in the prior-year period Supportive for deposits and asset pricing.
CASA ratio 41.1% 40.5% for FY2025 Low-cost deposit base maintained.
Gross impaired loans ratio 1.34% 1.28% for FY2025 Modest deterioration. Not yet at a level that breaks the credit story.
Loan loss allowance coverage 104.4% 106.7% for FY2025 Declining trend. Also note the company’s explanation that coverage was 113.6% excluding the reclassification of a rehabilitated account.
Net credit charge-off rate 10bp 8bp for FY2025 Still low, but no further improvement should be assumed.
Group CET1 ratio 14.956% 16.041% at end-December 2025 in the same table Decline within the presentation basis of the Bursa attachment. Continue to monitor for capital instruments.

5. What To Watch Next

Next, it is necessary to monitor whether NIM and the CASA ratio can be maintained at the same time. Even without deposit outflows, higher deposit retention costs would first pressure NIM and internal capital generation.

For asset quality, the gross impaired loans ratio, Stage 2, Stage 3, loan loss allowance coverage, and net credit charge-off rate should be assessed together. In particular, it will be important to identify whether deterioration emerges in SMEs, working-capital lending, commercial real estate, Indonesia, or large corporate exposures.

Technology, data, and AI investments under the ROAR30 strategy should be viewed from both long-term competitiveness and short-term cost perspectives. In 2Q FY2026, it will also be necessary to check whether the volatility in market-related income normalises.

6. Unverified / Pending

7. Sources