Malaysian banks brace for Q3 earnings pressure amid global bond turbulence

CIMB Securities Sdn Bhd says a global bond market sell-off is making the third-quarter environment more challenging for Malaysian banks, potentially leading to mark-to-market losses. Nevertheless, the research house retains an overweight stance on the sector, pointing to defensive earnings, resilient asset quality and strong capital, liquidity and loan-loss buffers. Its preferred stocks are Public Bank Bhd, RHB Bank Bhd and Hong Leong Bank Bhd, all kept on a buy recommendation.

Target prices are set at RM5.35 for Public Bank, RM9.00 for RHB Bank and RM26.40 for Hong Leong Bank. The analyst highlights Public Bank’s RM3.5 billion capital return plan, expected to sustain dividend yields above six percent through 2026-28, and notes RHB’s upcoming Basel 3.1 framework and Hong Leong’s digital growth and loan expansion.