MONEY MASTER

Malaysia’s banking sector is in a  stronger position in 2026 than before the pandemic , and remains well supported for further gains despite the recent rally in bank share prices, according to MBSB Research. The research house believes banks continue to offer attractive risk-reward, supported by Malaysia’s improving economic outlook and relative stability compared with neighbouring markets. With fundamentals strengthening across the board,  foreign investor interest is expected to remain a key valuation driver . Why the Banking Sector Still Looks Attractive MBSB Research highlights several structural improvements that set the sector apart from previous cycles: Stronger balance sheets  and capital buffers Improved asset quality  at multi-year highs Better cost discipline  and operational efficiency More disciplined management  and clearer regulatory visibility Despite higher valuations, earnings quality has improved, making current price levels more defensib...

Key Takeaways • ANZ has started reducing headcount in its institutional banking division, targeting middle- and back-office roles. • CEO Nuno Matos is driving a turnaround plan focused on eliminating duplication, improving culture, and tightening risk management. • The exact number of job cuts is unclear; details expected at ANZ’s strategy day in October. • Regulatory pressure remains elevated, with watchdogs scrutinising the bank’s bond trading and risk practices. Restructuring Moves Job cuts began Tuesday, focusing on middle- and back-office roles within institutional banking. Matos flagged in August that his priorities include role rationalisation, culture, and risk improvements. Planned layoffs in retail were accelerated last week after internal communication errors caused confusion. Regulatory Oversight The institutional unit, led by Mark Whelan, is under investigation by securities regulators over government bond trading. McKinsey & Co is conducting a firm-wide review after t...

  Key Takeaways: Hokuhoku Financial Group shares are up 95% YTD, the best among Japanese banks in the Topix Banks Index. Management expects the Bank of Japan (BOJ) to raise rates in October or December, positioning its portfolio toward short-dated JGBs to mitigate rate risk. Net income for FY2024 was ¥39.1 billion, the highest since FY2007, underpinning expectations of stronger shareholder returns. Strategic execution of synergies from its 2004 merger remains a key investor focus. Positioning for Higher Rates Hokuhoku Financial Group Inc., the top-performing Japanese bank stock in 2025, is shifting its securities portfolio toward short-dated Japanese government bonds (JGBs). President Hiroshi Nakazawa anticipates a BOJ rate hike later this year, in line with increasing analyst forecasts of an October or December move. By holding shorter-duration JGBs, Hokuhoku aims to reduce mark-to-market volatility and hold bonds to maturity without realizing losses. The group’s securities book s...

Profit Matches Forecasts Despite Margin Pressure Oversea-Chinese Banking Corp (OCBC), Singapore’s second-largest lender, reported a second-quarter net profit of  S$1.82 billion , down 7% from a year earlier, in line with analyst expectations. The decline was primarily driven by softer net interest income as margin compression continued to weigh on profitability. Key Financial Highlights Net Interest Margin (NIM):  Dropped to 1.92% from 2.20% in 2Q24. Net Interest Income Outlook:  2025 guidance lowered to a  mid-single-digit percentage decline , with NIM expected in the  1.90%-1.95% range  versus ~2% previously. Non-Interest Income:  Grew 5% YoY on stronger fee and trading income. Wealth Management:  Assets under management rose 11% to a record  S$310 billion , supported by net inflows and positive market performance. Dividend:  Interim ordinary dividend maintained at 41 Singapore cents. CEO Transition Amid Challenging Outlook Group CEO H...

  Analyst Recommendation : BUY Target Price : HKD  5.20 Current Price : HKD  4.70 Potential Upside :  +10.6% Dividend Yield :  3.0% Analyst Consensus : Buy: 19 Hold: 2 Sell: 0 Key Financials Metric FY2025F FY2026F FY2027F Revenue (HKD m) 693,802 724,286 758,069 Net Profit (HKD m) 255,967 261,661 273,432 Net Margin ~36.9% ~36.1% ~36.1% Forward P/E 7.36x Market Cap HKD 1.88 tn Technical Overview Price Trend : Holding above both  20-day  and  50-day EMAs  – short-term  bullish  trend. MACD  in positive territory and above the signal line –  bullish momentum . Resistance/Support : Resistance : HKD  4.80  (52W high), HKD  5.00 Support : HKD  4.60 , HKD  4.48 A breakout  above HKD 4.80  with volume may drive it towards  HKD 5.00+ . Performance Highlights YTD Return :  +25.8% Free Float : 95% Exchange : Hong Kong Key Takeaways Stable growth  expected: ~6% net profit CAGR over 3 ye...

This week brings a high-stakes combination of  corporate earnings, inflation data, and Fed commentary , all of which could influence market sentiment and monetary policy outlooks. Earnings Watch: Spotlight on JPMorgan, Bank of America & Netflix 1. JPMorgan Chase (JPM)  –  Reports Tuesday Trading strength : Estimated 8% jump in trading revenue amid early-quarter volatility. Loan profit growth : Forecasted +3.2% YoY. Expense control : Expected to remain flat YoY, aligning with management guidance. Outlook : Piper Sandler suggests JPM may raise full-year  net interest income (NII)  guidance. However, earnings growth is likely to  lag peers . 2. Bank of America (BAC)  –  Reports Wednesday Net interest income : Citi expects only a 1% sequential increase, impacted by  high deposit costs and lower yields . Revenue : Projected to fall 3% QoQ due to a strong Q1 base in trading. Outlook : Margin pressure remains, but still navigating through high-r...

Malaysia’s recent  interest rate cut  will likely hurt  smaller banks the most , according to analysts, due to their heavier reliance on  interest income from loans  compared to larger, more diversified peers. Banks Most at Risk: Bank Islam Malaysia (BIMB) Alliance Bank Malaysia (ABMB) Both are highly exposed due to a large share of  floating-rate loans . Alliance Bank, for example, has  84%  of loans under variable rates, making it especially vulnerable to margin compression. Why Smaller Banks Are Feeling the Pinch: Lower Overnight Policy Rate (OPR)  reduces  net interest margins (NIMs) . Interest on  floating-rate loans drops immediately , but  deposit rates adjust more slowly . Fierce deposit competition  keeps pressure on interest expenses. Reduced operating leverage  and  less income diversification  make smaller banks more sensitive to rate cuts. Analyst Adjustments: Public Investment Bank  slashe...

Chinese lenders are aggressively issuing  Tier-2 and perpetual bonds  to secure ultra-low funding rates, with yields hitting their lowest levels  since records began in 2009 . 🔹  Tier-2 Bonds : Avg. coupon at 2.35% 🔹  Perpetual Debt : Avg. coupon at 2.31% “Banks are locking in cheap funding amid a drop in government bond yields. They don’t expect such low yields to sustain,”  said Timothy Tan, Bloomberg Intelligence. Capital bond issuance surged 23% QoQ  to a record ¥638.7B (≈US$89B) in Q2 2025. Context: Relief for banks facing shrinking net interest margins and rising bad loans Consolidation of smaller rural banks continues Commercial banks' capital adequacy ratio stands at 15.28%, down from 15.74% in 2024   Outlook : Bond supply may taper in H2 as Q2 placements front-loaded funding needs.

As dividend season heats up, investors are eyeing which  Malaysian bank gives the most back to its shareholders —and  Maybank (1155.MY)  is clearly leading the pack with a  generous 73% dividend payout ratio . What is Dividend Payout Ratio? It measures how much of a company’s net earnings are returned to shareholders as dividends. Formula: Per-share:  DPS / EPS × 100% Aggregate:  Total Dividends / Net Profit × 100% Example:  If Maybank earns 83.61 sen per share and pays 61 sen in dividends →  73% payout  = RM73 returned for every RM100 earned. Who’s the Most Generous? MAYBANK – 73% payout : Prioritizes shareholder rewards with stable, high cash returns. HLBANK : More conservative—prefers reinvesting for growth and resilience. CIMB, RHBBANK, PBBANK : Balanced strategy—combines dividends with regional expansion and risk management. Why a High Payout Ratio Matters 1. Real Cash Flow:  Great for income-seeking investors like retirees. 2. Matu...

RHB Bank Bhd has unveiled its ambitious three-year strategy,  PROGRESS27 , which promises to enhance profitability, service quality, and sustainability from FY25 to FY27. While some of these targets appear to be on the higher end, analysts remain optimistic about the bank's ability to achieve them. Key Targets in PROGRESS27: Return on Equity (ROE):  Aiming for  over 12% . Cost-to-Income Ratio:  Targeted below  44.8% . Domestic Loan Growth:  Aiming for  7% annual growth . Fee-Based Income Growth:  Projected to grow by  10% annually . Despite these ambitious targets, analysts from  CIMB Securities  and  MIDF Research  have expressed confidence, largely due to RHB's strong financial performance and current trajectory. CIMB has raised its target price for RHB to  RM8.20  from  RM7.50 , while MIDF maintains its target at  RM7.40 . Strategic Focus: RHB’s PROGRESS27 strategy is focusing on higher-yielding segm...

Bank Reverses Expansion Plans in China’s Digital Wealth Market HSBC is cutting nearly half of its workforce at Pinnacle, its China digital wealth business , with around  900 job reductions , sources told  Reuters . Pinnacle, launched in  2020 , was meant to drive HSBC’s digital insurance and fund sales in China. The  cost-saving move highlights the challenges HSBC faces in growing its China business amid a broader restructuring push . Cost Review & Workforce Reduction HSBC  reviewed Pinnacle’s staff compensation and supplier expenses last year , finding a sharp increase in costs outpacing revenue. More than 500 insurance agents  have already left since June 2024 as the bank scaled back operations. The  layoffs will affect 100 staff at Pinnacle’s fintech unit , while another  300 will be reassigned within HSBC China . HSBC’s China Strategy & Restructuring HSBC has  long positioned China as a key growth market , committing  $6 bill...

Wells Fargo & Co. announced its departure from the  Net-Zero Banking Alliance (NZBA) , signaling growing divergence among Wall Street banks on climate commitments. The move follows  Goldman Sachs' exit earlier this month , as financial institutions face increasing scrutiny from  Republican lawmakers . Key Details No Explanation Given: Wells Fargo, headquartered in San Francisco, did not elaborate on its decision to leave the  NZBA , the world’s largest climate alliance for banks. Political Pressure: Financial firms, including Wells Fargo, are under scrutiny from  GOP-led investigations and lawsuits , alleging collusion and anti-competitive behavior in climate-related initiatives. "Climate Cartel" Allegations: The  House Judiciary Committee , chaired by Ohio Republican  Jim Jordan , accused environmental alliances like NZBA of forming a "climate cartel." Industry Trends: Other institutions, such as  BlackRock, Vanguard, and State Street , have ...

Key Highlights HSBC  and the  International Finance Corporation (IFC)  announced a $1 billion program to boost trade financing in emerging markets. The initiative will equally share the risk on a portfolio of trade-related assets held by banks in  20 countries across Africa, Asia, Latin America, and the Middle East. Objective and Scope Addressing the Trade-Finance Gap : Aims to close the  $2.5 trillion global trade-finance gap , with a focus on  Asia-Pacific , where demand far outpaces supply. Supports  cross-border trade  and critical export industries to stabilize global supply chains amid geopolitical tensions and trade barriers. Global Reach : Backed by IFC’s  Global Trade Liquidity Program , which has facilitated  $80 billion in trade volume over the last 20 years. Impact on Emerging Markets Boosting Supply Chains : Enables smoother trade flows in critical sectors, addressing supply-chain uncertainties. Encourages economic resilienc...

TMC Life Sciences CEO Dismissal:  Wan Nadiah Wan Abdullah Yaakob confirmed her dismissal as CEO over alleged misconduct. Response:  Wan Nadiah denies allegations and plans to  appeal the decision , stating no accusations of criminal breach, financial mismanagement, or integrity issues. Banking Updates: CIMB, OCBC, Maybank Panin Bank Stake:  CIMB, OCBC, and Maybank are  competing for a controlling stake  in Indonesia’s Panin Bank. Offers:  Non-binding offers submitted by OCBC and CIMB, with Maybank working on a potential bid. Gamuda and DNeX Collaboration Google Cloud Partnership:  Gamuda acquired a 20% stake in Cloud Space Sdn Bhd for RM18 million to tap into the  RM36 billion technology services market . Joint Venture:  Partnering with DNeX to deliver  Google Cloud services  to Malaysian businesses and government agencies. SkyWorld Development Affordable Housing in Penang:  Signed an agreement for Malaysia's  largest...

US Treasury Secretary Janet Yellen has raised concerns about the rising issue of fraud in the US banking system, calling it a huge and growing problem . Speaking at an event hosted by the American Bankers Association , Yellen emphasized that fraud is being seen nationwide , including a significant rise in fraudulent activities related to government checks . To combat this issue, the Treasury Department is increasingly utilizing artificial intelligence (AI) , which Yellen says has made a dramatic difference in detecting and addressing fraudulent activities within the banking system. The use of AI represents an important step forward as the department works to better identify and deal with fraud that is becoming more sophisticated and widespread. The adoption of AI technologies in financial regulation reflects ongoing efforts to modernize how fraud is tackled across the system, ensuring that institutions can better protect themselves and their customers.