Public Bank (Hold) - In Line, Despite Full Adoption Of FRS139

Public Bank (Hold)

In Line, Despite Full Adoption Of FRS139

• 1QFY12 results in line with HLIB and consensus.
• Full adoption of FRS139 resulted in write-back of excess CA which boosted book by RM859m and Tier-1 capital.
• Loans growth of 12.6% yoy in line with its target of 12-13% but slightly ahead of our 11% assumption. 
• Earnings growth driven by its retail business while Public Mutual NAV continued to expand. 
• Asset quality improved while LLC remained above the 100% mark, despite negative impact from FRS139 adjustment.
• Capital ratios stable.
• FY12-14 forecasts fine-tuned by circa +1%.
• Target price raised to RM14.09 following forecasts revision and higher book value due. 

Source: Hong Leong Investment Bank Research - 19 April 2012