Period 3Q12
Actual vs. Expectations
CIMB Niaga reported a
3Q12 PAT of Rp1,118b, up 7% QoQ but it showed signs of loan contraction in
certain of its market segments both on a YoY and QoQ comparison.
Dividends None
for the quarter.
Key Result Highlights
QoQ, the 3Q12 PAT of
Rp1,118b was only up by 7% (vs. 2Q: 12%) with the loan expanded marginally by
1% QoQ to Rp138.9t (14% YoY).
As at the 3Q12, we
are seeing an early sign of lending pressure, particularly on the consumer and
corporate segments. Consumer loans contracted by 1% QoQ, which was impacted by the
new LTV rule that took place on 15 June. Meanwhile, corporate loan shrunk by 5%
QoQ due to the repayment of a few accounts as well as a slower macro
development in Indonesia.
As such, the net
interest income was flat QoQ and stood at Rp2,481b. NIM rose by 36bps YoY but
was -3bps QoQ to 5.90% due mainly to strong price competition in both the
assets and liabilities.
However, the RM731b
in Non Interest Income was up marginally by 3% QoQ.
Opex of Rp1,520.0b
was also flat (+0%) QoQ. The advertising and personnel cost added mostly to the
higher opex. This led to a stable cost-toincome ratio of 46.99% (+10bps
QoQ). Outlook We had
turned cautious on the Indonesian banking industry earlier on in our 2Q12
result note. The outlook on 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 the next six months. Management has revised down its 2012 loan growth
target to 15-16% from 18-20% previously and sees no near term catalyst.
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 th current share price still offers a 9% upside potential
to our TP of RM8.20.
Valuation Maintaining our target price of RM8.20 being
2.0x FY13 PBV (which is at a -1SD level or 10% discount to its 3-year PBV
average of 2.2x), which also implies a 12.7x FY13 PER.
Risks Tighter lending rules and margin squeeze.
Source: Kenanga
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