RHB Research - Banking Sector Update

Sector Update

Banks – Feb ‘12 system data – Leading indicators for households improved mom                    Neutral

Sector Update

Public Bank – Fair value at RM16.07 (from RM15.00)                                                     Outperform

Maybank – Fair value at RM10.11 (from RM9.44)                                                           Outperform

CIMB – Fair value at RM8.05 (from RM7.47)                                                            Market Perform

AMMB – Fair value at RM6.75 (from RM6.23)                                                           Market Perform

Affin – Fair value at RM3.33 (from RM3.16)                                           Market Perform (Upgraded)

HL Bank – Fair value at RM12.11 (from RM11.18)                                                      Underperform

AFG – Fair value at RM3.85 (from RM3.69)                                                                Underperform

MBSB – Fair value at RM2.46 (from RM2.34)                                                           Market Perform

RCE – Fair value at RM0.57                                                                                    Market Perform

-          Feb ’12 system loan growth moderated further to +11.9% yoy but was up 0.4% mom, as compared to Jan ’12 loan growth of +12.1% yoy/-0.2% mom. Loan growth for both businesses and households moderated further to 11.7% yoy and 12.1% yoy, from 11.8% yoy and 12.3% yoy respectively in Jan ’12.

-          We raised our benchmark PER to 15x from 14x, which broadly lifts our fair value estimates for our coverage by 4-10%. However, our Neutral stance is unchanged with Maybank and Public Bank as our top picks for the sector.

 

Source: RHB Research - 2 April 2012