Period 2Q12/1H12
Actual vs. Expectations
The 1H12 PAT of RM2,120.4m was within the consensus’ forecast
(50%) and that of ours (47%).
Dividends The group declared an interim net dividend of
5 sen/share.
Key Result Highlights
2Q12’s net interest income enjoyed a heartening growth rate
at +7.3% QoQ and 12.4% YoY to RM1,864.8m. QoQ, the net interest margin expanded
by 9bps to 3.13% on better asset-liability management while the loan-todeposit
ratio hit a high of 98.8%. The +5.0% QoQ loans growth also contributed to the
encouraging net interest income growth. That said, the 14.5% YoY loan growth (excluding
bad bank) came ahead of our forecast of 11% and within the management’s
guidance of 13%-14%. Stronger corporate and business loans growth from the region
was the key driver of the outperformance here.
2Q12 non-interest income was at RM1,137m (-3.7% QoQ,), which
was strong as well as a result of robust investment gains from the volatile
forex market, the shift of the yield curve in debt capital markets and the
strong contribution from the wholesale banking’s PBT of RM773m, which was up
+19.5% from 1Q’s RM645m). The PBT of RM101m from Investment was -39.8% lower due
to higher realised fixed income gains in 1Q12.
The total RM875m PBT contributed by these two segments was higher by
7.4% QoQ, benefitting from the synergies derived from “CIMB 2.0”
reorganisation.
The net impaired ratio was at a historical low of 20bps with
a 82% allowance coverage. The annualised credit charge was below the
management’s target 0f 30bps.
CIMB Niaga meanwhile contributed RM487m to the group PBT,
making up a 33% share. In summary, the
achieved 16.0% ROE was within our expectation.
Outlook During the briefing, management remains
positive on the 2012 outlook as well as in achieving its key KPI targets.
Despite a slower consumer banking prospect in the region,
the group foresees strong ECM pipelines (including IPOs) as well as strong
demand from corporate lending and corporate bond in the region to drive its
earnings in 2H2012.
Meanwhile, we are positive on the group’s recent acquisition
strategies and believe that CIMB is poised for a rerating as the group is now
of the biggest proxies to ride the ASEAN region resurgence where the region’s economic growth
is expected to
remain resilient over
the next 2-3 years.
Change to Forecasts
Maintaining our FY12-13E PAT estimates of RM4,495m- RM4,740m
for CIMB.
Rating MAINTAIN OUTPERFORM
Our OUTPERFORM rating
on CIMB is
maintained as the current share price offers a 19% upside
potential to our revised TP of RM9.40.
Valuation We have raised our target price to RM9.40
(from RM8.50 previously) being 2.3 FY13 PBV (a mid point between 3-year PBV
average of 2.2x and its +1SD level of 2.4x) as we foresee an upside risk to our
earning forecasts for 2H2012.
Risks Tighter lending rules and a margin squeeze.
Source: Kenanga
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