CIMB Group (Hold) - FY12 ROE KPI Maintained At 16.4%

CIMB Group (Hold)

FY12 ROE KPI Maintained At 16.4%

• FY11 results in line with HLIB and consensus.
• Two one-offs were offset by additional provisions.  
• Second interim single-tier div 10 sen, making total for FY11 at 22 sen, below HLIB’s 29 sen projection.   
• FY12 KPI looking to maintain ROE at 16.4% (vs. HLIB’s 16.2%) as external headwinds has been largely factored in while competition from European banks has reduced.
• Underpinned by double-digit loans growth, higher NIM and delay in IB deals from FY11.
• Partly offset by higher overheads and slightly higher credit cost (though not expecting significant deterioration).
• Group capital ratios comfortably meet Basel III.
• Dividend payout likely to be at the lower range of its 40-60% KPI, thus, we reduced our projection from 55% to 45%.
• FY12-13 forecasts raised by circa 3% post the final results.
• Maintain Hold.
• Target price raised to RM7.78 (Gordon Growth with ROE of 16.3% and WACC of 10.5%), from RM7.69.

Source: HLIB Research 28 Feb 2012