Kenanga Research raised its target price on the country's largest bank Malayan Banking Berhad to 10.90 ringgit per share from 10.40 ringgit on the back of strong earnings in 2012.
Maybank, Southeast Asia's fourth-biggest lender by assets, on Thursday reported its October-December quarterly profit rose 16 percent to 1.46 billion ringgit, bolstered by higher net loans, advances and fee income.
But Maybank's unexciting loan growth of only 12.9 percent y/y in the fourth quarter was due to slower loan demand in Singapore and tighter markets in the region, Kenanga said in a note on Friday.
Kenanga added that the bank's issuance of 415 million new shares in October last year, which raised 3.7 billion ringgit, signalled that Malaysian banks are feeling the regulatory pressure to boost their capitals as they expand regionally.
"We think Maybank's equity issuance was a positive move that removes a dilution overhang that still remained in place for its government-linked company peers, CIMB Group," Kenanga said.
Kenanga kept its 'outperform' rating on the stock.
Maybank's shares rose 0.67 percent. The Malaysian benchmark stock index crept up 0.04 percent.
0945 (0145 GMT) (Reporting by Anuradha Raghu;Editing by Gopakumar Warrier; email@example.com; Reuters Messaging: firstname.lastname@example.org)