tag:blogger.com,1999:blog-27504100411130097882023-06-20T05:21:25.657-07:00FBM KLCIFBM KLCI | Malaysia Share Market | Make Money With Share Market | Bursa Malaysia | KLSE | Warrant | Share Market | Make Profit In Share MarketUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2750410041113009788.post-33761153249508284202009-10-15T20:17:00.000-07:002009-10-15T20:32:04.587-07:00Public Bank Report By HWangDBS<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_Gepabi82OHI/StfoQ8Fki7I/AAAAAAAACKA/VxfENOk8yjM/s1600-h/untitled.bmp"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 158px; height: 400px;" src="http://1.bp.blogspot.com/_Gepabi82OHI/StfoQ8Fki7I/AAAAAAAACKA/VxfENOk8yjM/s400/untitled.bmp" alt="" id="BLOGGER_PHOTO_ID_5393034456504503218" border="0" /></a><span style="font-weight: bold; color: rgb(255, 0, 0);">Proven resilience</span><br /><ul><li>3Q09 net profit was in line at RM639m, bringing 9M09 earnings to RM1.8bn.</li><li>NIM inched up 5bps driven by loan and deposit growth, coupled with robust asset quality.</li><li> Loan approvals were strong, led by housing loans </li><li> Maintain Buy and RM12.20 TP.</li></ul><span style="font-weight: bold; color: rgb(255, 0, 0);">Resilient earnings.</span> 3Q09 net profit was RM639m (+5% q-o-q, +4% y-o-y), driven by higher interest income. Noninterest income was marginally higher, led by higher unit trust management fees and fees from the sale of unit trusts, but mitigated by unrealised revaluation loss for trading derivatives. Cost-to-income ratio remained stable at 34%. NIM inched up 5bps led by strong growth of loans (+3% q-o-q) and deposits (+5% q-o-q), with healthy asset quality. YTD loan growth is 11%, within our 14% assumption for FY09. Deposit growth was largely from overseas operations, and loan-to-deposit ratio remained healthy at 72%. Asset quality remained resilient with gross and net NPL ratios at 0.9% and 0.8% (lowest in the industry), and flat absolute gross NPLs. Specific provision charge-off rate was 0.29%. Capital ratios (bank level)<br />remain robust with Tier-1 CAR at 11.0% and RWCAR at 12.1%. Overseas contribution was only 6% this quarter. No dividends were declared for 3Q09, as expected.<br /><br /><span style="font-weight: bold; color: rgb(255, 0, 0);">Strong momentum ahead</span>. Loan approvals remain strong, led by housing and corporate loan approvals. We expect Public Bank’s capital ratios to be enhanced with the adoption of FRS 139, Basel II Internal Rating Based Approach, and by the remaining 80m treasury shares currently sitting in its books.<br /><br /><span style="font-weight: bold; color: rgb(255, 0, 0);">Maintain Buy.</span> We believe Public Bank remains a core holding for its superior asset quality, ROEs, and dividends. Its ROE profile is expected to improve with less capital intense non-interest income activities and cost savings from FRS 139 implementation. Maintain Buy, with RM12.20 target price based on the Gordon Growth Model, implying 3.8x FY10 BV.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2750410041113009788.post-46684660115924418262009-09-29T20:55:00.000-07:002009-09-29T21:04:20.145-07:00Public Bank Target Price At RM12.20<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_Gepabi82OHI/SsLW8O46O3I/AAAAAAAACA4/GpKdYYSYwbQ/s1600-h/KNM.bmp"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 285px; height: 400px;" src="http://3.bp.blogspot.com/_Gepabi82OHI/SsLW8O46O3I/AAAAAAAACA4/GpKdYYSYwbQ/s400/KNM.bmp" alt="" id="BLOGGER_PHOTO_ID_5387104434565823346" border="0" /></a><span style="font-weight: bold;">Second to none</span><br /><ul><li>Beneficiary from adoption of FRS 139 due to excessive regulatory general provision reserves</li><li>Well positioned to benefit from recovery in consumer loan growth coupled with excellent asset quality and high ROEs.</li><li>Higher valuation justified. Buy (TP raised to RM12.20) for resilient earnings, ROEs and dividends.</li></ul><br /><span style="font-weight: bold; color: rgb(255, 0, 0);">Beneficiary of FRS 139 adoption.</span> Public Bank would be a key beneficiary from the adoption of FRS139 as it would save credit costs for general provisions (GP) going forward. As it is now, GP reserves amount to RM1.8bn, of which at least half can be written back as it can be considered excess provisions given Public Bank’s asset quality position. The write-back would be made into retained earnings, which would mean some upside to Tier-1 capital. What remains uncertain is whether the amount written back can be distributed to shareholders.<br /><br /><span style="font-weight: bold; color: rgb(255, 0, 0);">Excellent proxy for consumer recovery.</span> Public Bank still stands out as an excellent proxy of a quality bank. Loan growth still outpaces industry average while asset quality is still the best among peers. A surprise could come from a new non-interest income stream emerging from its tie-up with ING, which was sealed in 1Q08. Currently, it is still negligible, but over the next 5 years, it is estimated to comprise at least 10% of total fee income, giving it some latitude to diversify its reliance on unit trust sales and management fees. We have raised earnings by 1-6% to account for higher loan growth and non-interest income.<br /><br /><span style="font-weight: bold; color: rgb(255, 0, 0);">Higher valuation justified.</span> While valuations have surpassed +1SD of its historical 5 year mean, we believe Public Bank still remains a core holding for its superior qualities, chiefly asset quality, ROEs and dividends. ROE profile is expected to improve with less capital intensified<br />non-interest income activities and cost savings from FRS 139 implementation. There is a possibility of higher dividends from capital savings when Public Bank paid share dividends last year. Buy with TP raised to RM12.20 based on the Gordon Growth Model equivalent to 3.8x FY10 BV.<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_Gepabi82OHI/SsLYXMTO0cI/AAAAAAAACBA/Xpigg2ChnoQ/s1600-h/KNM.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 176px;" src="http://3.bp.blogspot.com/_Gepabi82OHI/SsLYXMTO0cI/AAAAAAAACBA/Xpigg2ChnoQ/s400/KNM.bmp" alt="" id="BLOGGER_PHOTO_ID_5387105997239013826" border="0" /></a>Unknownnoreply@blogger.com0