PBBANK’s 3Q Profit Falls 4%; TA Securities Downgrades as Deposit Competition Squeezes Margins

StockTipRatings · November 10, 2026

TA Securities analyst Li Hsia Wong downgraded Public Bank to “Hold” from “Buy”, cutting her target price to RM5.15 from RM5.36, implying 5.1% upside. The bank's 9M26 net profit was broadly unchanged at RM5.35 billion, meeting expectations, while third-quarter net profit fell 3.8% year-on-year to RM1.8 billion as higher loan-loss allowances offset income growth.

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Li expects intensifying deposit competition and continued loan repricing to constrain margins. Management widened its 2026 net interest margin compression guidance to 9–10 basis points from 6–7 previously, with September’s exit margin suggesting further pressure in the fourth quarter. She cut 2026–2028 core earnings forecasts by 6.7%, 4.1% and 2.9%, respectively, reflecting weaker margins, normalising credit costs and lower investment income.

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Looking ahead, stronger SME financing should help loan growth exceed management’s earlier 4%–5% target. Management also remains committed to distributing approximately 60% of operational profit, excluding the anticipated Hong Kong goodwill impairment. Nevertheless, Wong considers the potential total return insufficient for a “Buy”, with the revised valuation placing the stock within TA’s “Hold” return range.

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Separately, Kenanga Investment Bank analyst Peter Kong downgraded Public Bank to “Market Perform” from “Outperform”, cutting his target price to RM5.15 from RM5.95. He lowered his sustainable return-on-equity assumption to 12.4% from 13.5% and sees limited upside following the stock’s relative outperformance, although projected dividend yields of around 6% and its RM3.5 billion capital-return programme provide support.

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As of 9:23 a.m. on November 10, Public Bank’s share price fell 3.9% to RM4.71.

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Disclaimer: All content is AI-aggregated from public sources for informational and educational purposes only. StockTipRatings.com does not constitute investment advice. Past performance and historical statistics are no guarantee of future returns.

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