'Compelling regional growth' for Maybank

The acquisition of Singapore's banking franchise, Kim Eng Holdings, and
the longer-term growth potential of Bank Internasional Indonesia (BII),
will set the stage for a potentially compelling regional growth for
Malayan Banking Bank Bhd (Maybank).

OSK Research said the bank's
latest quarter net profit year-on-year (y-o-y) growth of 25.1 per cent
and quarter-on-quarter growth of 11.4 per cent, respectively, far
outpaced the industry's aggregate of 15.6 per cent and 8.2 per cent,
respectively.

"Its earnings were propelled by an
industry-beating loans growth of 17.6 per cent, y-o-y, the hefty 62.1
per cent drop in loans loss provision and maiden contribution from Kim
Eng," OSK Research said in a note today.

It said BII was also
aggressively expanding via new hiring and enlarging its branch network
by 43 per cent over the next one-and-a-half years.

The research
firm said BII's operating leverage would begin to flow through by
financial year 2012 and financial year 2013 on a more stable cost base
while generate new revenue from its enlarged presence.

"This
would naturally help bring down the cost-to-income ratio closer to the
industry average, driven largely by revenue growth from its enhanced
infrastructure investments, as costs stabilises," it said.

OSK
Research is maintaining a "Buy" call and fair value of RM9.60 on Maybank
given the qualities provided by the bank and its alluring 7.6 per cent
dividend yield which is the highest among domestic banking stocks. --
Bernama