In a statement, it said CIMB has healthy capital and profitability metrics, good operating momentum, orderly resolution of Covid-19 restructured loans, and geographical diversification across key Asean markets, where asset quality has been better managed in recent years.

As for RHB, it said the bank’s capital remains stronger than CIMB’s, but asset quality, credit costs, and overall returns have moved in opposite directions, improving at CIMB while weakening at RHB.

“We saw RHB’s targeted return on equity (ROE) of over 10% for the financial year 2024 (FY2024) as ambitious.

“This has turned out to be the case thus far in the first half of 2024 (H1 2024) at 9.4%, and we see the second half of 2024 (H2 2024) being broadly similar,” it said.

CIMB, on the other hand, delivered a steady improvement in ROE at 11.4% in H1 2024, in line with its FY2024 target of 11% to 11.5%.

“The spread differential is slightly wide, but liquidity in the bond is likely to be limited given it is a dated issue, while Maybank does not have any liquid senior benchmark bonds outstanding,” it said.

CreditSights said Maybank issues callable Formosa bonds to Taiwanese investors.

“We cover it from a fundamental rather than a relative value approach,” it said.

Hence, it gave Maybank a “market perform” recommendation for its reasonable profitability, as well as comfortable capital, liquidity, and asset quality metrics.