New issue: Maybank 5Y USD bond at 5.3% IPG

Introduction

- Malayan Banking Berhad is Malaysia's largest bank by market capitalisation which is headquartered in Kuala Lumpur. The group provides diversified regional franchise spanning consumer banking, corporate and investment banking, insurance/takaful, and Islamic finance, with a presence across ASEAN including Singapore, Indonesia and the Philippines.

Table 1: Universe of Malaysia listed banks

	Market Cap
MALAYAN BANKING BHD	127.9B
PUBLIC BANK BERHAD	97.1B
CIMB GROUP HOLDINGS BHD	86.1B
HONG LEONG BANK BERHAD	51.2B
RHB BANK BHD	36.5B
AMMB HOLDINGS BHD	22.8B
HONG LEONG FINANCIAL GROUP	21.6B
ALLIANCE BANK MALAYSIA BHD	8.6B
AFFIN BANK BHD	5.4B
MBSB BHD	4.9B
BANK ISLAM MALAYSIA BHD	4.8B
Source: Bloomberg, iFAST compilations. Data as of 2pm, 8 September 2026.

 

- The group is rated as A3 (Stable) by Moody's and A- (Stable) by S&P, which is the same credit rating as Malaysia sovereign, reflecting its systemic importance domestically and strong government linkage.

1H26 revenue under pressure, but still resilient

- 1H26 operating income fell marginally by 4.6% y-o-y to RM15.6 billion, primarily due to slight drop in net interest income, decrease in insurance/takaful services and smaller net gain on foreign exchange.

- Subsequently, profit before taxation and zakat, and profit for the financial period fell by 2.4% yoy and 0.5% yoy respectively.

- Nonetheless, the group has maintained disciplined cost management, with 1H26 overhead expenses declining 3.9% yoy to RM7.2 billion. Personnel costs declined 6.6%, while marketing expenses dropped 19.9%, partially offset by higher establishment cost from continued investment in technology initiatives.

Net interest margin & OPR outlook

- NIM expanded by 10bps to 2.10%, being a slight improvement from the 2.0% seen in 1Q26 and 2.05% in FY25, as management cite the gradual repricing of both loans and deposits.

- Bank Negara Malaysia has now held the OPR at 2.75% for a seventh consecutive MPC meeting (as of September 3, 2026), citing continued price stability and resilient 2026 growth of around 5%. We believe BNM will hold the rates at current level for the rest of 2026.

- Hence, this stable rate backdrop should cap further NIM compression from the funding-cost side, even if margin expansion may still be modest given continued deposit competition.

Asset quality

- Gross impaired loan ratio ticked up to 1.35% (30 June 2025: 1.30%), a deterioration of 5 bps compared to a year ago, as certain retail and SME contributions has pushed GIL up.

- This is nonetheless still at a healthy absolute level for the sector as per RAM banking report, the overall banking system’s gross impaired loan (GIL) ratio edged up to 1.43% as at end-June 2026 (end-December 2025: 1.37%).

- Loan loss coverage (LLC) came in at approximately 103.1% as at 30 June 2026, down from 117.9% seen in 2Q25. Accordingly, LLC including regulatory reserve also came in lower at 118.0% relative to 132.2% seen in 2Q25. We see this as more of a provisioning normalisation after a period of conservative over-provisioning. While the LLC softened, the overall buffer against the impaired book is still intact.

Healthy capital strength

- Maybank's CET1 ratio of 15.65% and total capital ratio of 19.41% as at June 2026 sit roughly 700–800 basis points above regulatory minimums of 8.0% and 11.5% (inclusive of the 1.0% D-SIB buffer), underscoring a comfortably capitalised balance sheet.

- Per RAM’s research, the Malaysian banking system’s common equity tier-1 ratio was around 13.9% as of end-June 2026, so Maybank sits well above the domestic sector average.

- This capital strength supports the bank's ability to absorb the new USD senior notes without pressuring its regulatory ratios.

- Liquidity coverage ratio (LCR) at 130.0% and net stable funding ratio (NSFR) at 113.4% as of 1QFY26 provide further comfortable buffers on the funding side.

The Offering
- Against this backdrop of solid capital buffers and credit metrics, and a stable OPR environment, Maybank is coming to market with a USD 5-year senior unsecured bond at an initial price guidance (IPG) of 5.30%, equivalent to 5Y+80bps.

- Overall, we see the new 5Y Maybank bond as somewhat fully valued at the current IPG, as the 5.30% yield offers limited pickup over comparable A3-rated Malaysian bank bonds. The existing Affin and AmBank USD bonds are trading at around 5.2%–5.3%, despite having shorter maturities of 3.7 years and 3.4 years, respectively.

- Hence, investors are receiving limited additional yield for taking on the longer duration of the Maybank bond, although this is partly justified by Maybank’s stronger franchise and credit profile.

Issue	Ask price	Yield to worst (%)	Years to maturity	Credit rating (Moody)
MAYMK 5.300% 15Sep2031 Corp (USD)	100.0*	5.3%*	5*	A3
AHBMK 5.112% 04Jun2030 Corp (USD)	99.3	5.3%	3.738	A3
AMMMK 5.252% 23Jan2030 Corp (USD)	99.9	5.2%	3.376	A3
Source: Bondsupermart, iFAST compilations. Data as of 8 September 2026.

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