MAYBANK (1155) : Maybank poised for better 2015, says CIMB Research
KUALA LUMPUR: CIMB Equities Research said while 2014 has proven to be a tough one for Malayan Banking (Maybank), it envisages better prospects in 2015, premised on improvements in the operating environment in Indonesia, and the stabilised growth in Malaysia.
It said on Thursday Maybank’s 9MFY14 net profit missed expectations due to lower non-interest income and a higher tax rate.
The research house said the 9MFY14 earnings were at 69% of its full-year forecast and 71% of consensus.
“We lower our EPS forecasts due to (1) a 3%-4% cut in projected FY14-16 non-interest income, and (2) an increase in assumed tax rate from 25% to 26.5% for FY14.
“This largely offsets the impact of the roll-over of valuation to end-15, leading to an unchanged DDM-based target price (COE of 9.7%; LT growth of 4%).
“Despite the weak 9M results, Maybank remains an Add and our top pick as we envisage better prospects in 2015 arising from improvements in the operating environment in Indonesia,” it said.
Commenting on the 9MFY14 results, it said net profit inched down by 0.7%, impacted by (1) the plunge in the earnings of its Indonesian unit, (2) a loss of RM268.6mil in its insurance unit, and (3) an 80.9% on-year slump in foreign exchange gains.
CIMB Research said moreover, a 24bp on-year drop in net interest margin to 1.87% also limited the growth in net interest income to only 0.8% on-year in 9MFY14.
All these offset the 44.5% on-year decline in loan loss provisioning. Fee income still grew but at a weak 2.7% on-year in 9MFY14.
Loan growth picked up from 12.6% on-year in June 2014 to 13.8% on-year in Sep 14. The improvement came mainly from Malaysia and Indonesia (to 8.4% and 10.7% on-year respectively in September 2014) following the slowdown in these markets in 2Q14.
Although the momentum in Singapore weakened from 21.6% on-year in June, it remained strong at 19.8% on-year in September, ahead of the above markets.
Although the gross impaired loan ratio rose from 1.5% in June, it was still healthy at 1.65% in September. Loan loss coverage fell from 107.7% in June 2014 to 95.4% in September.
http://www.thestar.com.my
KUALA LUMPUR: CIMB Equities Research said while 2014 has proven to be a tough one for Malayan Banking (Maybank), it envisages better prospects in 2015, premised on improvements in the operating environment in Indonesia, and the stabilised growth in Malaysia.
It said on Thursday Maybank’s 9MFY14 net profit missed expectations due to lower non-interest income and a higher tax rate.
The research house said the 9MFY14 earnings were at 69% of its full-year forecast and 71% of consensus.
“We lower our EPS forecasts due to (1) a 3%-4% cut in projected FY14-16 non-interest income, and (2) an increase in assumed tax rate from 25% to 26.5% for FY14.
“This largely offsets the impact of the roll-over of valuation to end-15, leading to an unchanged DDM-based target price (COE of 9.7%; LT growth of 4%).
“Despite the weak 9M results, Maybank remains an Add and our top pick as we envisage better prospects in 2015 arising from improvements in the operating environment in Indonesia,” it said.
Commenting on the 9MFY14 results, it said net profit inched down by 0.7%, impacted by (1) the plunge in the earnings of its Indonesian unit, (2) a loss of RM268.6mil in its insurance unit, and (3) an 80.9% on-year slump in foreign exchange gains.
CIMB Research said moreover, a 24bp on-year drop in net interest margin to 1.87% also limited the growth in net interest income to only 0.8% on-year in 9MFY14.
All these offset the 44.5% on-year decline in loan loss provisioning. Fee income still grew but at a weak 2.7% on-year in 9MFY14.
Loan growth picked up from 12.6% on-year in June 2014 to 13.8% on-year in Sep 14. The improvement came mainly from Malaysia and Indonesia (to 8.4% and 10.7% on-year respectively in September 2014) following the slowdown in these markets in 2Q14.
Although the momentum in Singapore weakened from 21.6% on-year in June, it remained strong at 19.8% on-year in September, ahead of the above markets.
Although the gross impaired loan ratio rose from 1.5% in June, it was still healthy at 1.65% in September. Loan loss coverage fell from 107.7% in June 2014 to 95.4% in September.
http://www.thestar.com.my
