KUALA LUMPUR (Jan 3): MIDF Research remains Neutral on the banking sector as it expects net profit of banks next year to be moderated by slower economic growth.
The research house said on Tuesday that although the Nov 2011 statistics showed an increase in growth rate of loan applications, the stronger growth rate was attributed to the effect of a lower base of loan applications in Nov 2010 which was lower by 6.7% compared to Oct 2010.
MIDF Research said it expects banks to be prudent and conservative in terms of capital management in light of the Basel III requirements especially for requirement for potential capital buffer even though as of now, all banks appeared to be comfortable in meeting the higher capital ratio requirements of Basel III.
“Our BUY calls on RHB CAP (TP: RM9.20) and AFG (TP: RM4.10) remained unchanged as of now. We have adjusted our TP for AFG to RM4.10 from RM3.84 previously based on 1.6x PBVR on FY13 BVPS.
“We are still NEUTRAL on AMBANK (TP: RM6.03), HONG LEONG BANK (TP: RM10.50), CIMB (TP: RM7.50), MAYBANK (TP: RM8.80) and PUBLIC BANK (TP: RM13.00),” it said.
The research house said on Tuesday that although the Nov 2011 statistics showed an increase in growth rate of loan applications, the stronger growth rate was attributed to the effect of a lower base of loan applications in Nov 2010 which was lower by 6.7% compared to Oct 2010.
MIDF Research said it expects banks to be prudent and conservative in terms of capital management in light of the Basel III requirements especially for requirement for potential capital buffer even though as of now, all banks appeared to be comfortable in meeting the higher capital ratio requirements of Basel III.
“Our BUY calls on RHB CAP (TP: RM9.20) and AFG (TP: RM4.10) remained unchanged as of now. We have adjusted our TP for AFG to RM4.10 from RM3.84 previously based on 1.6x PBVR on FY13 BVPS.
“We are still NEUTRAL on AMBANK (TP: RM6.03), HONG LEONG BANK (TP: RM10.50), CIMB (TP: RM7.50), MAYBANK (TP: RM8.80) and PUBLIC BANK (TP: RM13.00),” it said.
