Period 1Q12
Actual vs. Expectations
The 1Q12 PAT of
RM436m was within the consensus’ forecast (26%) and that of ours (25%).
Dividends No
dividend was declared.
Key Result Highlights
The loan book at
RM95.5b contracted marginally by 1.8% QoQ due to a major RM2.0b corporate loan repayment.
Net interest margin was stable at 2.4% with the net interest incomes of RM709m
staying relatively flattish on both QoQ and YoY basis (at 0% and +4%
respectively).
The stable NIM above
(FY11: 2.41%) was due to better liability management, which saw a slowing deposit
growth with the L/D down to 81% (from 84% in 4Q11).
1Q12 non-interest
incomes (excluding Islamic Income contribution) meanwhile came in at RM330.4m,
up +16.7% QoQ and +24% YoY as the group achieved higher net gains in FX
transactions, securities portfolio and MTM on derivative hedging. The overall total revenue of RM1,150.4m
meanwhile rose 1.2% QoQ and 10.7% YoY.
The total cost of
RM524.4m was 16.9% higher on a YoY basis due to higher staff and admin costs
that drove the cost-to-income ratio to 45%.
Asset quality
improved with the gross impaired loans ratio higher at 3.59% due to the
adoption of MFRS139, which resulted in an annualised credit charge ratio of
19bps. However, the loan coverage decreased marginally to 69% (from 74% in 3QFY11).
In total, the 1Q12
ROE of 14.7% was within our expectation and management’s previous guidance.
Outlook Its
merger with OSKIB is strategically an ideal fit, adding significant
diversification of clienteles, regional scale in capital markets and immediate access
into other ASEAN markets. (Please refer to our other report today for more
details on this.)
Change to Forecasts
We are maintaining
our FY12E PAT of RM1,719.5m and FY13E of RM1,840.6m.
Rating MAINTAIN
OUTPERFORM
RHBCAP stands out
from its peers as it trades at 1.2x BV compared to its long-term average of
1.8x. In our view, the current price of RHBCAP has ignored its ROE of 11-12%
(post new shares issuance for OSKIB merger) and its growth potential as a real
challenger to the market leaders.
Valuation We
are adjusting our TP to RM9.00 based on a targeted 1.4x its FY2013 BV to factor
the dilution of larger share base.
(Please refer our separate report on RHBCAP for details.)
Risks Tighter lending rules and a margin squeeze.
Source: Kenanga
No comments:
Post a Comment