KUALA LUMPUR (Feb 23): HwangDBS Vickers Research is maintaining a Buy on MALAYAN BANKING BHD [] and target price of RM10.60 TP (2.3x FY12 BV).
It said on Friday the TP was based on the Gordon Growth Model and assuming 16% ROE, 7% growth, and 10.8% cost of equity. Dividend yield remains attractive at 6%.
HDBSVR said the net profit of RM1.297 billion was driven by higher revenues, albeit the impact was reduced by higher expenses and provisions.
“Excluding one-off adjustments for Takaful operations (under Bank Negara Malaysia’s new framework) and interest income (reversal from FRS139), earnings were in line. Excluding the adjustment, NIM fell over the six month period, indicating continued competitive pressures.
“There was also an adjustment for actuarial transfer from insurance surplus (RM151 million) under non-interest income that is typically recognised at the end of the financial period,” it said.
The research house said that provisions rose due to larger individual allowances (domestic corporate accounts) and lower recoveries. Gross NPL ratio improved to 2.9%.
It said on Friday the TP was based on the Gordon Growth Model and assuming 16% ROE, 7% growth, and 10.8% cost of equity. Dividend yield remains attractive at 6%.
HDBSVR said the net profit of RM1.297 billion was driven by higher revenues, albeit the impact was reduced by higher expenses and provisions.
“Excluding one-off adjustments for Takaful operations (under Bank Negara Malaysia’s new framework) and interest income (reversal from FRS139), earnings were in line. Excluding the adjustment, NIM fell over the six month period, indicating continued competitive pressures.
“There was also an adjustment for actuarial transfer from insurance surplus (RM151 million) under non-interest income that is typically recognised at the end of the financial period,” it said.
The research house said that provisions rose due to larger individual allowances (domestic corporate accounts) and lower recoveries. Gross NPL ratio improved to 2.9%.
