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Proposed merger of banks stirs some interest

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Proposed merger of banks stirs some interest Empty Proposed merger of banks stirs some interest

Post by Cals Fri 08 Aug 2014, 17:28

Proposed merger of banks stirs some interest
Business & Markets 2014
Written by Maybank IB Research   
Friday, 08 August 2014 09:35

Banking sector
Maintain neutral: The investors we met during our recent marketing trip to Singapore and Hong Kong have largely given Malaysian banks a miss, given the lack of strong catalysts and premium valuations to the region. Investors remain wary of rising inflation and the impact on consumer demand.
Instead, much of the interest in banks revolved around the proposed merger of CIMB Group Holdings Bhd, RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB).
Operationally, we see positives from stabilising net interest margins and a pick-up in business loans to buffer moderating consumer loan demand. We forecast operating profit growth of 12% for 2015 versus 6% in 2014 and net profit growth of 10% versus 8% in 2014.
On the CIMB-RHBCap-MBSB merger, we presented our alternative scenario of a merger between CIMB and RHBCap, followed by the injection of their Islamic banking assets into MBSB to maintain the latter’s listing status.
Our top pick in the banking sector is Alliance Financial Group Bhd (“buy”, target price or RM5.50). — Maybank IB Research, Aug 7
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This article first appeared in The Edge Financial Daily, on August 8, 2014.[/size]
Cals
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