KUALA LUMPURL TA Research has raised the target price of AmBank group to RM3.70 from RM3.40. and reiterated its Buy call.
The research house said on Wednesday AmBank registered a net profit of RM386.6mil for 1Q22, a steep improvement from net losses amounting to RM4.7bil in 4Q21 (due to exceptional one-off items of RM4.8bil and related legal and professional expenses of RM21mil).
“Compared to a year ago, net profit rose 5.9%, coming in above ours and consensus full-year forecasts.
“Incorporating better-than-expected 1Q22 results, we adjust our topline growth assumptions, namely NIM, non-NII, and contributions from Islamic Banking.
“With that, we revise the FY22/23/24 net profit forecast higher to RM1.356bil/RM1.542bil/1RM,829bil respectively,” it said.
TA Research said this is line with management’s target, i.e., to maintain a PATMI target of RM350mil per quarter.
Incorporating the upward revision to our earnings estimates and updating the risk-free rate assumption to 3.0% from 2.6%, we raise AmBank’s TP to RM3.70 from RM3.40.