When Maybank reported FY2025 results, stronger wealth income, funding optimisation and low credit costs were supporting its push toward higher returns under ROAR30. Six months into 2026, some of those drivers are strengthening, while the earnings mix shows why sustaining the improvement will depend increasingly on the quality and composition of income. Second-quarter net profit increased 2.4% year on year and 8.5% from the previous quarter to MYR 2.69 billion ($668 million), narrowing the first-half decline. Six-month net profit fell 0.9% to MYR 5.17 billion ($1.28 billion), while return on equity was 11.6%, compared with Maybank’s full-year guidance of at least 11.8%. First-half pre-provision operating profit declined 6.3%. Khairussaleh Ramli, President and Group Chief Executive Officer, attributed the quarterly improvement to “our core fee franchise” and reduced provisions. He said the second-half priority was to “translate opportunities into quality earnings”. Beyond its FY2026 guidance, ROAR30 targets return on equity of 13% to 14% by 2030. Wealth and fee growth continue as market income weakens The shift toward wealth-related fee income identified at FY2025 continued into the first half. Wealth management fees grew 48.4%, driven by higher investment and bancassurance income. Corporate and investment banking fee income increased 15.6%, while cross-border payment volumes rose 15.8%. Investment assets under management grew 15.9% to MYR 95.4 billion ($23.7 billion), including 23.7% growth in Islamic investment assets. The quarterly figures showed further momentum in customer-related fees. Second-quarter wealth fees rose 61.5% year on year to MYR 490 million ($122 million), while investment banking-related fees increased 58.4% to MYR 440 million ($109 million). Ramli called wealth Maybank’s “major growth story”. Stronger customer-related fees did not fully offset weaker market-related income. Global markets income fell 51.9% year on year, contributing to a 9.6% decline in second-quarter non-interest income to MYR 2.49 billion ($618 million). Ramli linked the wealth opportunity to “the rising affluence of the population in ASEAN” and described Maybank’s penetration in Malaysia as still at an early stage. Current and savings deposits improve funding mix as loan-to-deposit ratio rises Maybank continued to improve the composition of its funding base. Current and savings account deposits grew 7.6% year on year, lifting their share of total deposits to 41.5% from 37.8%. Fixed deposits fell 10.9% over the same period. Shafiq Abdul Jabbar, Group Chief Financial Officer, described the shift as a move toward a “cheaper source of funding”. Net interest margin reached 2.12% for the first half, 10 basis points higher than a year earlier and above Maybank’s full-year guidance of 2.05% to 2.10%. The second-quarter margin was 2.10%, also 10 basis points higher year on year but four basis points lower than in the previous quarter as funding costs increased in Malaysia and Indonesia. In Singapore, net fund-based income rose 18.6% in local-currency terms as funding costs declined, although deposits fell 8.3% year on year. The stronger current and savings account base was accompanied by a 2% decline in reported total deposits, although deposits were broadly stable after excluding currency effects. Loans increased 2.7% year on year to MYR 695.9 billion ($172.8 billion), or 4.6% excluding currency movements, within Maybank’s full-year guidance of 4% to 5%. The loan-to-deposit ratio rose to 94.7% from 90.2% a year earlier, indicating that loan growth is also absorbing more of the available deposit base. Credit costs remain supportive, with the normalised measure at 20 basis points Net operating income declined 2.3% year on year to MYR 7.51 billion ($1.86 billion) and pre-provision operating profit fell 2%. Profit before tax nevertheless increased 3.7% to MYR 3.64 billion ($904 million). Across loans, financial investments and other assets, second-quarter net impairment charges declined by about MYR 244 million ($61 million) from a year earlier. That exceeded the approximately MYR 131 million ($33 million) increase in profit before tax. The first-half composition was more nuanced. Loan impairment charges were broadly unchanged at MYR 798 million ($198 million), compared with MYR 808 million ($201 million) a year earlier. Much of the decline in total impairment losses came from a MYR 338 million ($84 million) writeback on financial investments, compared with a MYR 65 million ($16 million) charge a year earlier. Lower credit costs continued to support earnings, although the reported level should be read alongside Maybank’s normalised measure. For the 12 months to June, the reported net credit charge was eight basis points, while the normalised measure was 20 basis points after excluding a provision reclassification related to an oil and gas borrower restructured in September 2025. Maybank maintained its full-year guidance at about 20 basis points. Management overlays increased from MYR 2.4 billion ($596 million) in the first quarter to MYR 2.6 billion ($646 million), with 61% allocated to retail and small and medium-sized enterprise exposures. The gross impaired-loan ratio was 1.35%, compared with 1.30% a year earlier, while loan-loss coverage stood at 103.1%. Etiqa adds a new capital-allocation lever Maybank is acquiring Ageas’s remaining 30.95% interest in Maybank Ageas Holdings, the parent of insurance and takaful group Etiqa, for MYR 4.83 billion ($1.20 billion), after adjusting for an expected pre-completion dividend. Completion is targeted for September. Full ownership would allow Maybank to retain the earnings currently allocated to Ageas through the non-controlling interest. The bank has not quantified the expected net earnings accretion after accounting for the purchase consideration and funding costs. Maybank is also examining how capital within Maybank Ageas Holdings can be restructured and redeployed. It plans to replace about MYR 2.1 billion ($521 million) of equity with subordinated debt. Ramli said this would allow equity to be moved to the bank and provide greater capital-management flexibility at group level. The transaction also supports Maybank’s effort to increase insurance and takaful penetration across its customer base of approximately 30 million people, including about one million affluent customers. Bancassurance is already contributing to wealth fee growth. Technology investment progresses ahead of earnings benefits Maybank plans to invest MYR 10 billion ($2.48 billion) in technology through 2030, including MYR 1.5 billion ($372 million) in FY2026. It spent MYR 200 million ($50 million) in the first half, with Ramli saying expenditure would increase as the transformation accelerates. The bank’s technology agenda covers core banking and payments modernisation, infrastructure resilience, cloud and artificial intelligence adoption and common digital platforms across the region. Maybank aims to select a technology partner for its regional core banking and payments platform by the end of 2026. Information technology expenses rose 28.5% to MYR 657 million ($163 million), contributing to a 13.2% increase in establishment costs during the first half. Total operating expenses nevertheless declined 3.9%. The modernisation programme targets annual savings of MYR 450 million ($112 million) from lower legacy-system maintenance costs. Maybank’s cost-to-income ratio was 49.5% for the first half, close to its full-year guidance of about 49% and above its ROAR30 target of no more than 47% by 2030. Six months into 2026, Maybank’s results provide evidence that some of the structural drivers identified at year-end, particularly wealth and fee growth and the shift toward current and savings account deposits, are continuing. However, lower pre-provision profit, the gap between reported and normalised credit costs and the higher loan-to-deposit ratio qualify the improvement in the underlying earnings mix. Full ownership of Etiqa adds a new capital-allocation lever, while the financial benefits of technology investment remain largely prospective.
