Analysts were left disappointed and surprised after Malayan Banking Bhd (Maybank) failed to declare dividend for the second quarter ended June 30, 2020 (2Q20).
Hong Long Investment Bank (HLIB) analyst Chan Jit Hoong expressed surprise in his note today as no dividend was declared “as management takes a wait and see approach, before divvying in 4Q”.
MIDF analyst Imran Yassin Yusof said the research house was surprised that Maybank did not announce any dividend for 2Q20, as had been its norm for the past few years.
“Most of all, we are disappointed that there were no dividends in the quarter as per norm in previous years. In our opinion, this could be due to the uncertain conditions and possibly the management’s intention to preserve capital in light of this.
“Hence, we are slashing our dividend expectations to a payout ratio of 40%, which is the lower bound of its dividend policy,” Imran said.
HLIB and MIDF published their notes today in response to Maybank’s 2Q20 financial announcement yesterday.
Maybank reported a lower net profit for 2Q20 of RM941.73 mil from RM1.94 bil a year earlier, as net interest income and Islamic banking income dropped, as well as due to significantly higher allowance for impaired loans amid a Covid-19 pandemic-driven weaker economic outlook.
Group revenue declined to RM11.79 bil in 2Q20 from RM13.05 bil, Maybank said.
Maybank said for the first half of FY20, cumulative net profit fell to RM2.99 bil from RM3.75 bil a year earlier, while revenue was lower at RM25.01 bil against RM26.03 bil.
Maybank’s shares closed RM7.33 or 1.74% lower, giving the banking group a market value of RM82.04 bil.
