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Issuer Flash: Maybank

Issuer: Maybank | Document: Issuer Flash | Date: 2026-08-28 | Event: Q2 Fy2026 Results

Report date: 2026-08-28 Event date: 2026-08-27 Event title: 2Q FY2026 Results

1. Flash Conclusion

Maybank's 2Q FY2026 result leaves the core senior-credit view intact: the group remains a large, deposit-funded Malaysian and ASEAN banking franchise, with reported group CET1 and total capital ratios of 15.657% and 19.413% at 30 June. However, the disclosure gives less support for treating current earnings as uniformly improving. Profit attributable to equity holders rose 2.4% year on year in 2Q to RM2.69bn, but was 0.9% lower over 1H at RM5.17bn. Modest growth in net interest income plus Islamic banking income was offset at the half-year level by a lower insurance/takaful service result and weaker other operating income. The stronger 2Q outcome also includes material valuation and disposal effects, so it should not be read as a simple acceleration in recurring earnings.

For bondholders, the more consequential changes are the modest rise in impaired loans and expected-credit-loss allowances, together with lower - though still substantial - capital ratios than at end-2025. Customer deposits increased modestly and remain slightly above net customer loans, which is consistent with the group's deposit-led funding profile. The results therefore point to continued resilience rather than a deterioration in senior-credit fundamentals, but they reinforce the prior need to monitor asset quality, internal capital generation and the quality of non-interest income rather than extrapolate low credit costs or market gains.

A further near-term consideration is the proposed RM4.83bn acquisition of Ageas Insurance International NV's remaining 30.95% interest in Maybank Ageas Holdings Berhad. The financial statements show that this transaction remains subject to Bank Negara Malaysia approvals and do not provide a pro-forma CET1 or RWA effect. The current disclosure does not itself demonstrate a change in senior-credit fundamentals, but it also does not permit an assessment of the transaction's ultimate capital or funding effect; creditors should not assume that the 30 June ratios already reflect the transaction.

2. What the 2Q / 1H Results Showed

The unaudited group statements show a 2Q improvement, but a nearly flat first half. Profit attributable to equity holders was RM2.690bn in 2Q FY2026, up from RM2.628bn in the comparable quarter. For 1H FY2026 it was RM5.171bn, compared with RM5.217bn a year earlier. Net interest income and Islamic banking income increased 1.6% year on year in the half to RM10.842bn. In contrast, the insurance/takaful service result fell 21.7% to RM677.9mn and other operating income fell 15.4% to RM4.041bn.

Metric 30 Jun 2026 / 1H FY2026 Comparator Credit reading
2Q profit attributable to equity holders RM2.690bn RM2.628bn 2.4% YoY increase, but not sufficient on its own to demonstrate stronger recurring earnings.
1H profit attributable to equity holders RM5.171bn RM5.217bn 0.9% YoY decline; core-income growth was offset elsewhere in the income mix.
1H net interest and Islamic banking income RM10.842bn RM10.670bn 1.6% YoY increase supports earnings absorption capacity.
Group CET1 / total capital 15.657% / 19.413% 16.041% / 19.960% at 31 Dec 2025 Capital remains high, but the decline should be monitored, particularly around dividends and the MAHB acquisition.
Gross impaired loans RM9.362bn RM8.810bn at 31 Dec 2025 Asset quality has softened modestly.
Net impaired-loan ratio 0.80% 0.79% at 31 Dec 2025 Still low, but directionally adverse.
Customer deposits / net customer loans RM700.920bn / RM686.394bn RM698.210bn / RM676.981bn at 31 Dec 2025 Deposits remained slightly above net loans, supporting the funding profile.

The quarter's other operating income increased by RM250.2mn year on year to RM2.929bn. The disclosure attributes much of that movement to an unrealised mark-to-market gain on derivatives of RM2.134bn and higher disposal gains on financial assets at fair value through profit or loss, offset by valuation and foreign-exchange effects elsewhere. This composition is important. It does not weaken Maybank's liquidity or capital directly, but it makes the reported quarter less useful as a measure of through-the-cycle earning power than the headline profit figure suggests.

3. Credit Read-Through: Capital, Funding and Asset Quality

At 30 June, the group reported CET1 of 15.657%, Tier 1 of 16.029% and total capital of 19.413%, all calculated before deducting the electable portion of the declared dividend. These disclosed ratios remain central to the senior-credit assessment, but this flash does not calculate regulatory headroom because the statement does not provide the issuer-specific buffer requirements needed for that comparison. The direction is weaker than at 31 December 2025, when the corresponding ratios were 16.041%, 16.419% and 19.960%. The 1H statement does not establish how much of this change is attributable to RWA, profit retention, other comprehensive income, dividend treatment or business mix. It should therefore be treated as a monitoring development rather than proof of a structural erosion in capital strength.

Funding remains a relative strength in the limited data available. Customer deposits increased by RM2.71bn from year-end to RM700.92bn, while net customer loans increased by RM9.41bn to RM686.39bn. The statement does not provide a current CASA ratio, LCR or NSFR, so the favourable deposit-versus-loan comparison is not a substitute for a full liquidity assessment. It does, nonetheless, support the continuity of Maybank's deposit-led funding model rather than suggesting an immediate reliance on wholesale funding.

Asset-quality indicators warrant closer attention. Gross impaired loans rose by RM552mn to RM9.36bn, while the net impaired-loan ratio edged up to 0.80%. Stage 2 customer-loan allowances rose to RM3.53bn from RM3.41bn at year-end and Stage 3 allowances to RM3.54bn from RM3.15bn. The statement also identifies working-capital lending as the largest economic-purpose category of impaired loans, followed by residential and non-residential property exposures. These data do not demonstrate a broad-based stress event, and the 1H loan-loss allowance charge was broadly unchanged year on year at RM798mn. They nevertheless make it more important to track whether impairments remain contained as the loan book grows and whether coverage, credit costs and capital develop consistently with that outcome.

4. MAHB Acquisition: Capital Deployment Watchpoint

The financial statements disclose an implementation agreement, announced on Bursa Malaysia on 3 August 2026, for Maybank's wholly owned Etiqa International Holdings Sdn. Bhd. to purchase Ageas's 30.95% interest in MAHB for RM4.83bn, adjusted for a proposed RM800mn MAHB dividend on completion. Following completion, MAHB would become a wholly owned Maybank subsidiary. The proposed acquisition remains subject to BNM approval for Maybank and its substantial shareholders.

The transaction adds a discrete capital-allocation and execution question to an earnings period in which group capital ratios have already declined from year-end. The disclosure provides neither a pro-forma effect on CET1 nor a detailed funding plan, so it does not support a conclusion on the transaction's eventual credit effect. Investors in senior debt should therefore monitor the final regulatory approvals, purchase funding, accounting treatment and post-transaction capital disclosures. For subordinated or AT1 instruments, the same information matters more directly because instrument-level loss absorption is more sensitive to the size and usability of the capital buffer.

5. What To Watch Next

6. Sources