Malaysia Banks Set to Pay Dividends: A Q4 Earnings Breakdown

Despite a dip in share prices following the recent earnings season, Malaysia's banking giants are back in focus this week as dividend payouts begin to roll out. With $MAYBANK (1155.MY)$ , $CIMB (1023.MY)$, $RHBBANK (1066.MY)$, and $PBBANK (1295.MY)$ all delivering FY25 results that met expectations, the market's attention has now shifted from earnings to execution. While the headline numbers were broadly in line, the real differentiators lie in each bank's capital management strategy and dividend outlook.

Maybank: A Regional Pillar with Limited Near-Term Catalysts

$MAYBANK (1155.MY)$ delivered a solid FY25 performance, posting a net profit of RM10.5 billion, up 4% year-on-year and in line with expectations. Net interest margin (NIM) improved by 7 basis points sequentially, supported by better fixed deposit repricing and ongoing loan-to-deposit ratio (LDR) optimisation. While loan growth moderated to 1.7% YoY—partly weighed by currency headwinds and portfolio adjustments in Indonesia—the underlying business remains resilient. During the results briefing, management provided limited updates on capital management initiatives. However, the group continues to offer an attractive 6% dividend yield, backed by a robust FY26 dividend payout ratio (DPR) guidance of 72–73%, which stands among the highest in the sector. While the scope for near-term upside from organic earnings may be modest, Maybank’s strong dividend profile and industry-leading payout provide compelling income support for investors.

MAYBANK will distribute a dividend of RM0.33 per share on March 26, with the equity registration date set for March 13.

CIMB Group: The Underappreciated Capital Management Story

$CIMB (1023.MY)$ delivered a steady FY25 performance, posting a 2% uptick in net profit to RM7.9 billion, in line with expectations. The bank declared a full-year DPS of 47.1 sen, but the real story lies in its capital flexibility. Under its Forward30 strategy, CIMB targets an optimal CET1 ratio of 13-14% by FY30, suggesting significant headroom for excess capital. Analysts estimate that at the lower end of this range, the bank could unlock up to RM5.0 billion in surplus capital, translating to a potential 6% yield upside. This positions CIMB as a compelling story for income-focused investors. Operationally, the bank is doing the right things: reallocating risk-weighted assets (RWA) back to Malaysia (which now delivers a 12% ROE), maintaining strict cost control, and keeping credit costs well contained. Despite a cautious tone from management, the runway for higher payouts remains open.

CIMB will distribute a dividend of RM0.2035 per share on March 16, with the equity registration date set for March 17.

RHB Bank: A Dividend Hike Masks Underlying Constraints

$RHBBANK (1066.MY)$ closed FY25 with a net profit of RM3.4 billion, marking an 8% increase year-on-year. The standout feature of its results was a better-than-expected dividend, with full-year DPS rising 16% to 50 sen, pushing the payout ratio to an impressive 65%. This long-awaited move finally rewarded income investors, bringing its dividend yield to an attractive 6%. However, beneath the surface, the picture is more constrained. Management has guided for a FY26 DPR of 50-60%, but analysts believe further increases may be difficult to sustain. The final Basel III reforms are expected to shave 80-85bp off the bank’s CET1 ratio, limiting capital flexibility. Furthermore, with LDR already optimised at 99% and loan loss coverage (LLC) sitting at a relatively low 77%, there is little buffer for asset quality weakness. While the bank has raised its cost take-out target to RM800 million, tangible benefits have yet to fully materialise. The stock price is currently more than two standard deviations above its historical average.

RHBBANK will distribute a dividend of RM0.35 per share on March 30, with the equity registration date set for March 16.

Public Bank: Conservative Guidance, Hidden Upside

$PBBANK (1295.MY)$ delivered a steady FY25 performance, with net profit inching up 1% to RM7.2 billion, meeting expectations. Its asset quality remains the gold standard in the sector, with a gross impaired loan (GIL) ratio of just 0.51%. The bank guided for FY26 with a tone of cautious optimism: while NIM is expected to slip by a “stable to mid-single digit” basis points, this is expected to be offset by double-digit non-interest income (NOII) growth, driven by SME cross-selling, wealth management, and bancassurance. The only sore point for the market was the flat DPR guidance of 60%, which some interpreted as underwhelming. However, analysts view this as a prudent buffer ahead of the final Basel III implementation, which could actually add 1ppt to the CET1 ratio and unlock an estimated RM3.7 billion in excess capital (c.3.8% yield upside). As the bank approaches its 60th anniversary, expectations for a special capital reward remain alive.

PBBANK will distribute a dividend of RM0.12 per share on March 26, with the equity registration date set for March 12.

Conclusion

The FY25 results season underscores a clear divergence in Malaysia’s banking sector. While all four majors delivered in-line earnings, the distinction lies in their capital trajectories and shareholder return potential. Maybank and RHB offer respectable yields but face valuation constraints or balance sheet limitations that cap upside. In contrast, CIMB and Public Bank present more nuanced stories: the former holds a treasure trove of excess capital yet to be priced in, while the latter combines pristine asset quality with a conservative stance that could unlock significant value post-Basel III. For investors, the message is clear—income is available, but the real alpha lies in those with the flexibility to surprise on the upside.

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