Tuesday, November 15, 2011

OSK Research maintains Maybank fair value at RM9.60

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.

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