Tuesday, 13 March 2012

CIMB Research maintains Hong Leong Bank target price at RM11

KUALA LUMPUR (March 13): CIMB Equities Research said Hong Leong Bank’s proposed sale of MIMB Investment Bank is not a surprise given the bank’s wish to focus purely on commercial and Islamic banking.

It said on Tuesday that since MIMB is expected to be sold at its book value, the deal will be neutral for the group.

“The sale of MIMB, which provides minimal earnings to Hong Leong Bank, does not alter our cautious stance on the banks’ prospects. It remains a Sell given its below-industry loan growth and above-sector P/E,” it said.

CIMB Research said it still tags a 10% discount to its DDM value and its target price remains at RM11.

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