A YEAR that was expected to bring economic stability and improved prospects have been partly overshadowed by external volatility.
“Nevertheless, we remain constructive with a positive stance on the banking sector,” said Maybank Investment Bank (MIB).
Cumulative net profit growth is projected to be a faster 5.7% in 2026 (4.5% in 2025) with higher return on earnings (ROE) of 10.5%.
“Moreover, there is the prospect of higher dividend payouts from some banks, in our view,” said MIB.
With GDP growth expected to hold firm at 5.1% in 2026 (2025: 5.2%), we project operating profit growth to strengthen to 5.3% (2025: 3.4%), driven by 5% domestic loan expansion and stable net interest margins.
Net profit growth is expected to rise to 5.7% (2025: 4.5%) amid benign credit costs, while aggregate return on average equity (ROAE) is forecast to edge up to 10.5% from 10.4%.
A prolonged conflict in the Middle East could dampen economic growth and prompt further cuts in interest rates. “Our Economics Team estimates that a 10% sustained rise in crude oil price would negatively impact global growth by -0.2 ppts,” said MIB.
A 1-ppt point cut to world GDP growth is estimated to negatively impact Malaysia’s GDP growth by 0.8-ppts.
“While external headwinds persist, we remain constructive on the banking sector, with a Positive call,” said MIB.
With expectation of sustained GDP growth of 5.1% in 2026, MIB expects cumulative operating profit growth for our basket of banks to gather pace to 5.3% in 2026 from 3.4% in 2025, driven by domestic loan growth of 5% and stable net interest margins.
Net profit growth is projected to be a faster 5.7% versus 4.5% in 2025, as credit costs remain benign. Aggregate ROAE is projected to be a tad higher at 10.5% in 2026 versus 10.4% in 2025. —Mar 6, 2026
Main image: e-Spin
