RHB Research maintains Buy on Maybank, FV RM11.40

KUALA LUMPUR: RHB Research said Malayan Banking's (Maybank) net profit of RM1.51bil in the first quarter ended March 31, 2013 (Q1, 2013) was within its and consensus' expectations.
It said the Q1, 2013 pre-impairment operating profit was 8% below its estimates, when annualised.
However, this was cushioned by credit cost of just 11 basis points (annualised) versus its 30 basis points assumption.
“Year-on-year
net profit growth was driven by a combination of healthy net interest
income growth of 10% on-year (on-year loan growth was 12.9% while net
interest margins held up quite well, down just 4.0 basis points (bps)
on-year) and lower credit cost of 11 basis points versus 26bps a year
ago when annualised.
“Quarter-on-quarter, net profit growth was mainly due to lower credit cost (Q4, 2012: 21bps, annualised)” it said.
RHB Research said annualised loan growth was just 5.9% as corporate lending domestically and Indonesia were soft.
It said Maybank's domestic consumer loan growth and overseas growth in Hong Kong and Thailand, however, were buoyant.
The
research house said loan and capital market pipelines remain healthy
and hence, management maintained the 12% loan growth and 15% returns on
equity key performance indicators (KPIs).
“We tweaked down our
FY13-14 EPS projections by up to 3% after adjusting for DRP shares, but
raised our fair value to RM11.40 from RM10.90, after rolling forward
valuations to 2014. Maintain Buy,” it said.