Period 1Q12
Actual vs.
Expectations
Within
expectations. 1Q12 PAT of RM1,347m made up 27% of the consensus’ forecast and
26% that of ours.
Dividends No
dividend declared.
Key Result Highlights
The 1Q12
net interest income contracted by 6.1% QoQ to RM2,020.7m. On the same
comparison, net interest margin was also lower by 24bps to 2.37% given the more
moderated loan growth of 1.5% in the quarter.
The squeeze
in the NIM was mainly driven by 1) lower rates in assets that cut the NIM by
8bps, 2) additional sub-debt cost being raised during the quarter (-4bps), 3) a
one-off unwinding interest adjustment under FRS139 (-10bps) and from other
accounting treatments (-2bps).
The total
group loans grew 6.1% (on an annualised basis), which was a disappointment as
it is below the KPI target of
16.2%. However, loan
demand is seeing momentum in 2Q2012, and hence management still aiming for a growth
target in the range of 13-15% for 2012.
We note
that the non-interest incomes were strong at RM1,654.5m (+7.5% QoQ and +54.5%
YoY), thanks to a stronger Kim
Eng’s contribution in 1Q12.
As a result, the group’s total
incomes grew 27.7% YoY and -1.6% QoQ with fee-based incomes contributing 40.9%
of the total incomes (vs. 37.4% in 4QCY11).
1Q12
overhead cost of RM2.0b was on the high side with a cost-to-income ratio of
48.7% (vs. 49.9% in 4QFP11), mainly due to IT expenses.
The NPL
outstanding balance of RM7.0b was lower in 1Q12 (from RM8.04b in 4QCY11), with
the net impairment ratio improving 29bps QoQ to 1.57%. The annualised credit
charged-off rate is estimated at only 28bps to gross loans. Loan loss coverage
meanwhile was recorded at 95%.
Outlook Earnings
upside could come from a lower credit charged-off rate going forward as well as
a stronger than expected fee-based incomes after the acquisition of Kim
Eng. A pro-forma Core Capital Ratio of
10.2% should see Maybank well positioned to meet the 1 January 2013 Basel 3
minimum requirement of 7% along with its organic credit growth. Furthermore, its RM1.9b unutilised tax credit
should sustain the dividend payout ratio of 80%. The stock offers 5.3% dividend yield.
Change to Forecasts
There are
no changes to our earnings estimates.
Rating
MAINTAIN OUTPERFORM
Our
OUTPERFORM rating is maintained as the current share price implies a 22.3%
total upside (together with a 5.0% net div. yield).
Valuation Target
Price of RM10.40, based on 2.0x FY13 P/BV, implying 14.9 FY13 PER, is retained.
Risks Unexpected
slowdown in fee incomes.
Source: Kenanga
No comments:
Post a Comment