Tuesday 19 June 2012

Malayan Banking - Good progress for global wholesale division BUY


-  We are maintaining BUY on Malayan Banking Bhd (Maybank), with an unchanged fair value of RM9.80/share. This is based on an ROE of 14.8% FY12F, which translates into a fair P/BV of 2.1x.

-  Maybank has hosted an analysts briefing for its Global Wholesale Banking and Investment Banking divisions, which are led by Abdul Farid Alias, Deputy President & Head Global Wholesale Banking and Tengku Dato' Zafrul Tengku Abdul Aziz, CEO Maybank Investment Bank & Maybank Kim Eng. 

-  To recap, Global Wholesale Banking (GWS) is one of the three new pillars of Maybank, since the inception of the House of Maybank in 2010. There are now five key divisions/product lines in Global Wholesale Banking (GWS): (1) Investment banking; (2) Global markets, which includes forex and treasury solutions; (3)  Corporate banking; (4) Transaction banking; and (5) Asset management.

-  Since July 2010, the GWS division had been revamped with the key focus now on client coverage. This allows Maybank to provide end-to-end solutions from origination to execution throughout the region.

-  The company has benchmarked its GWB progress on several fronts. These include market share – with market share of the global market’s foreign exchange market having risen steadily to 15.75% in March 2012 from 14.26% in April 2011. 

-  For the trade finance segment, Maybank’s market share has reached a recent new high, of 27.0% in March 2012 from 22.5% in June 2010. Besides this, Maybank has also alluded to its market share of transactional banking currently estimated at 30%.

-  We maintain BUY. We believe key rerating catalysts from hereon are:- (a) improvement in asset quality, which will provide comfort that loan loss provisioning will likely be lower; (b) better-than-expected ROE; and (c) better-thanexpected dividend.  

Source: AmeSecurities

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