Wednesday, May 18, 2011

AMMB slips after FY end March 31 earnings within consensus

KUALA LUMPUR: Shares of AMMB HOLDINGS BHD [] slipped in late morning trade on Wednesday, May 18 after it announced its net profit for the financial year ended March 31, 2011 at RM1.34 billion.

At 11.06am, it was down three sen to RM6.37.'' The FBM KLCI rose 4.96 points to 1,541.23. Turnover was 346.10 million shares valued at RM670.59 million. There were 260 gainers, 288 losers and 267 stocks unchanged.

OSK Research, in its review of AMMB's financial performance, said the FY ended March 31, 2011 earnings were within consensus.

'The results were lifted by lower provisions, bond investment gains and forex income. The group has done well in diversifying its loans mix with floating rate loans now making up a larger 52% of its total loans base vs just 38% 2 years ago.

'However its low CASA ratio of 12% could jeopardise margins under the current rising interest rate environment coupled with continued escalation in deposit competition. We are maintaining our TP of RM6.90 (1.80x FY12 PBV, 13.4% ROE) and NEUTRAL recommendation,' it said.

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