Public Bank Berhad (PBB) continues to show resilience despite a challenging external tariff environment, particularly in terms of dividend performance.

CIMB Securities has revised its financial projections for PBB to reflect the impact of softer external conditions. Key adjustments include expectations of slower loan growth, a 25-basis-point cut in the policy rate, and higher credit costs—raised from 15 bps to 22 bps—for the financial year 2025.

In a more adverse scenario, where credit costs return to the pandemic peak of 34 bps, dividend yields are still projected to remain at a respectable 4.7%. This highlights PBB's robust earnings resilience and consistent dividend delivery, even under economic pressure.

The target price has been revised down from RM5.60 to RM5.10. Nevertheless, the recommendation remains a "Buy", signalling continued confidence in the bank's ability to navigate macroeconomic headwinds.

The sector as a whole has faced a downgrade, with the net earnings growth forecast for 2025 sharply reduced to 0.7% year-on-year, down from a previous estimate of 9.0%. This follows expected indirect effects from US tariffs, including supply chain disruptions and structural changes in consumption and investment behaviour.

CIMB Securities has downgraded its rating for the banking sector from "Overweight" to "Neutral", reflecting heightened uncertainty in trade flows and broader economic sentiment.

Among its peers, PBB maintains a strong position. With a market capitalisation of RM84.8 billion and a forward P/E of 11.7x for FY24F, the bank presents a compelling proposition for income-seeking investors. Even under a more stressed scenario, its dividend outlook remains intact—a testament to the group's conservative risk profile and efficient cost management.

While the Malaysian banking sector faces heightened volatility due to shifting global trade dynamics, Public Bank Berhad's consistent dividend yield and resilient earnings profile position it as a standout choice. With a revised yet still attractive target price and a maintained "Buy" rating, PBB offers stability in an otherwise uncertain environment.