Budget 2027 wage measures could lift bank deposits by up to RM10.1 billion
Nomura also upgraded Public Bank to ‘buy’ from ‘neutral’, setting a target price of RM5.40.
Nomura estimates that Budget 2027 measures involving wages and payroll tax deductions could bring Malaysian banks between RM5.7 billion and RM10.1 billion in deposit inflows. Its calculations reflect the RM2,000 minimum wage and rules linking corporate tax deductions for non-MSMEs to wages paid through banks.
The research house said much of the additional salary payments may quickly leave accounts through spending, withdrawals or overseas remittances. Even so, it sees potential benefits from wider account use, transaction banking, remittances and the mobilisation of low-cost deposits.
Nomura said improved borrowing capacity and affordability, especially for lower-income households, could help steady household loan growth after a period of moderation.
It also regarded investor concerns about higher bond yields affecting banks’ earnings, capital and ability to pay dividends as overstated. Malaysia’s 10-year government bond yield was 3.84% at the time of reporting, compared with 5.19% for the US.
Alongside the Public Bank upgrade, Nomura retained its ‘buy’ rating on CIMB Bank while lowering its target price to RM8.90. It also revised Maybank’s target price to RM11.70.
