Maybank (Buy)
CFS Briefing Reaffirms Our Positive View
- Analyst briefing yesterday on its Community Financial Services (CFS – which handles the retail, SME and business segments).
- The briefing reaffirms our positive view about the company prospects as well as the positive impact on earnings (which has already shown results) from its transformation.
- Despite expectations of slower growth in 2012 (vs. 2011), it is optimistic that momentum from the transformation would enable the group to outpace the industry.
- New responsible lending guideline – in line with internal practice and merely resulted in recalibrating the DSR from gross to net pay basis. Although Jan 12 numbers dropped by circa 20%, it could be due to seasonal and Feb numbers have stabilized.
- Branch transformation (over three years) will not have significant impact on CIR given its aim of widening products and services while some branches will be right-sized.
- Maintain Buy.
- Target price maintained RM10.12 based on Gordon Growth with ROE of 15.6% and WACC of 9.9%.
Source: HLIB Research 9 March 2012
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