Period 2Q12
Actual vs. Expectations
CIMB Niaga reported a
2Q12 PAT of Rp1,047b, +12% QoQ and +28% YoY, driven by a strong loan growth and
a higher LDR. With higher LDR, NIM also expanded, outperforming the industry in
the last two (2) quarters.
Dividends None
for the quarter.
Key Result Highlights
On a QoQ comparison,
the 2Q12 PAT of Rp1,047b was higher by 12% due to a continuous balance sheet
expansion.
Loan growth increased
by 6% QoQ to Rp137.5t (18% YoY). CIMB Niaga experienced a spike in the loan
growth in May & June 2012 as clients were chasing the deadline of the new
LTV rule taking place on 15 June. In addition, Personal Loans (+770% YoY) and
Mikro Loans (+150% YoY) also contributed to the higher loan growth.
Net interest income
was up by 13% QoQ to Rp2,482b. NIM rose by 36bps YoY and 26bps QoQ to 5.93%.
The higher than expected 2Q12 NIM expansion (above management’s guidance of
5.4%-5.6%) shows that the group is doing fairly well in focusing on the higher
margin products despite the implementation of the new LTV rule and the loan
rate tightening by the central bank. The high LDR of 98.8% contributed heavily
to the NIM expansion in our view.
However, the RM719b
in Non Interest Income fell 26% QoQ due to the group registering a few one-off
treasury gains previously in the 1Q.
Opex of Rp1,521.0b
was up 4% QoQ. Advertising and personnel cost added mostly to the higher opex.
This led to a higher cost to income ratio of 46.89% (+64bps QoQ).
Outlook We are
still cautiously optimistic on the Indonesian banking industry despite CIMB
Niaga doing fairly well. The outlook on the loan demand for the auto and
property industry remains uncertain due to the implementation of the new LTV
rule. As a result, the earnings visibility would be unclear at least for next
six months.
Change to Forecasts
Maintaining our
FY12-13E PAT of RM4,030.8m- RM4,394.7m for CIMB.
Rating OUTPERFORM
Our OUTPERFORM rating
on CIMB is maintained as the current share price still offers a 9% upsidepotential
to our TP of RM8.50.
Valuation Maintaining our target price of RM8.50 being
2.1x FY13 PBV (the 2.1x also being the 3-year PBV mean), which also implies 14x
FY13 PER.
Risks Tighter lending rules and margin squeeze.
Source: Kenanga
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