HLIB Research 17 Nov 2011 (AMMB)

AMMB (HOLD)

Lower FY12 KPIs

§  2QFY12 results in line with HLIB and consensus as management guiding for lower 2H.

§  Interim dividend of 6.6 sen (+10% yoy).

§  Results typified by absence of extra AFS profit, NIM at expense of loans, preemptive provision for one corporate loan and swings in MTM of HFT securities and derivatives.   

§  FY12 KPIs cut to 13.6-14% ROE and 10-12% profit growth vs. 14-16%.  HLIB’s forecast in line and at lower ranges.

§  Loans and deposits contraction due to addressing NIM erosion and focus on profitable growth. However, CASA grew strongly at 5.3% qoq and 20.5% yoy.

§  Credit cost guidance of 50-55bps lower than HLIB’s 60bps.

§  Asset quality improved despite the preemptive classification and provisioning of one corporate loan.

§  Capital ratios remained strong, BASEL III core equity ratio improved to 8.3% from 7.6%, no change to dividend policy.

§  Maintain HOLD with unchanged target price of RM6.02.