KUALA LUMPUR (March 20): A number of local banking counters continue to attract investor interest past their recent ex-dividend dates as investors remain optimistic of continued strong dividend payouts on the back of robust earnings resilience.

The share prices of Public Bank Bhd, Hong Leong Bank Bhd, and Malayan Banking Bhd (Maybank) have inched up between the close of their ex-dividend dates and March 19.

Public Bank led with a 1.4% increase, going from RM4.22 to RM4.28 followed by Hong Leong Bank (0.9%), RM19.26 to RM19.44 and Maybank (0.3%) RM9.62 to RM9.65. The Oct-Dec period was the fourth quarter for Public Bank and Maybank while it was the second quarter for Hong Leong Bank.

Kenanga Research banking analyst Clement Chua told The Edge that banks are an attractive choice for large funds as a long-term investment given the sector still has strong dividend potential because of the likelihood of more generous payouts.  

“Perhaps the banks are gaining greater appreciation as they demonstrate expansionary prospects through supportive loan growth, despite the challenges posed by strained net interest margins (NIM) in 2023,” Chua said.  

In the October-December quarter, all banks experienced a year-on-year (y-o-y) decline in NIM. However, on a quarter-on-quarter (q-o-q) basis, Hong Leong Bank was the only bank to achieve an NIM increase, which amounted to 1.85%.  

For calendar year 2024 (CY2024), Chua anticipates bank loan growth to hover around 5.5-6%, relatively higher than 5.3% in CY2023. He projects that business loans would enjoy a stronger momentum, while household loans should also perform reasonably well.  

Likewise, Rakuten Trade Sdn Bhd’s equity research vice president Thong Pak Leng said that banking stocks have extended their rally despite passing the ex-dividend date as investors are confident of a better banking outlook.  

Thong emphasised that “banks play a crucial role in driving the economy”. “As businesses recover from the post-Covid-19 pandemic period and other sectors continue to grow, banks play an important role in supporting the industry by providing loans, managing risk, and offering financial advice,” he told The Edge.
 
CIMB Group Holdings Bhd and Bank Islam Malaysia Bhd continue to trade unchanged over the same period at RM6.61 and RM2.55, respectively  

CIMB had declared a dividend of 18.5 sen per share in the October-December period, along with a special dividend of seven sen per share while Bank Islam paid a dividend of 4.22 sen per share. 

RHB Bank Bhd and Affin Bank Bhd have yet to announce their ex-dividend dates, although they have proposed dividends of 25 sen per share and 5.76 sen per shares, respectively.  

Banks that did not propose any dividend for the October-December quarter were AMMB Holdings Bhd, Alliance Bank Malaysia Bhd — both their financial year-end is March 31 — and MBSB Bhd.

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