KUALA LUMPUR (Nov 15): OSK Research is maintaining its earnings assumptions and fair value for Malayan Banking at RM9.60 at which it is trading at 1.98 times FY12 price-to-book value and 14.7% return on equity.
It said on Tuesday the stock is currently trading at an undemanding 1.70 times FY12 PBV and further supported by a highly attractive gross dividend yield of 7.6%, which is the highest among the domestic banking stocks.
“The group reported a 25.1% on-year and equally impressive 11.4% on-quarter increase in earnings. Robust loans growth (+17.6% on-year), a 62.1% drop in loans loss provisions and maiden contribution from Kim Eng Holdings were the earnings drivers.
“Focusing solely on the on-quarter revenue performance, revenue declined 2.7% due to the high base effect of 4Q11 results which included a RM321.1 million year-end transfer of actual surplus to insurance income.
“On a normalised comparison, on-quarter revenue increased 6.2% on-quarter largely driven by a 16.4% on-quarter increase in Islamic Banking income, while net interest income growth trends was relatively flat as net interest margin pressure continues to persists,” it said.
It said on Tuesday the stock is currently trading at an undemanding 1.70 times FY12 PBV and further supported by a highly attractive gross dividend yield of 7.6%, which is the highest among the domestic banking stocks.
“The group reported a 25.1% on-year and equally impressive 11.4% on-quarter increase in earnings. Robust loans growth (+17.6% on-year), a 62.1% drop in loans loss provisions and maiden contribution from Kim Eng Holdings were the earnings drivers.
“Focusing solely on the on-quarter revenue performance, revenue declined 2.7% due to the high base effect of 4Q11 results which included a RM321.1 million year-end transfer of actual surplus to insurance income.
“On a normalised comparison, on-quarter revenue increased 6.2% on-quarter largely driven by a 16.4% on-quarter increase in Islamic Banking income, while net interest income growth trends was relatively flat as net interest margin pressure continues to persists,” it said.
