Period 3Q12/9M12
Actual vs. Expectations The 9M12 PAT of RM3,263.2m was within the
consensus’ forecast (76%) and that of ours (72%).
Dividends No
dividend was declared.
Key Result Highlights The 3Q12 net interest income saw a
moderating growth rate at +1.1% QoQ and 13.4% YoY to RM1,885.7m. QoQ, the net interest
margin narrowed by 4bps to 3.08 % while the loan-to-deposit ratio was also
lower at 86.9%. The +0.5% QoQ loans growth also contributed to the flat net
interest income growth. That said, the 9.8% YoY loan growth came below our
forecast of 11% and the management’s guidance of 13%-14%. The moderating loans
growth numbers were mainly deflated by the IDR/RM depreciation.
The 3Q12 non-interest income was strong at RM1,294.0m (+13.8%
QoQ), thanks to robust investment gains from the volatile forex market, the
shift of the yield curve in the debt capital markets and the strong
contribution from its wholesale banking segment’s PBT of RM822m, which was up +6.5%
from 2Q’s RM773m. The PBT of RM124m from Investment was also +21.1% higher. The
total RM946m in PBT contributed by these two segments was higher by 8.2% QoQ,
continuing the benefit of the synergies derived from the group’s “CIMB 2.0”
reorganisation.
The net impaired ratio was at a historical low of 18bps with
a 84% allowance coverage. The annualised credit charge was below the
management’s target 0f 30bps.
Despite a strong top line growth, the higher than expected cost
of RM2,007m, upped 8.7% QoQ, mitigated the positive impact on the bottom line.
During the quarter, the group booked in a RM30m-RM40m one-off integration cost
as 50% of the RBS franchise came on board in 3Q.
The achieved 16.3% ROE was within our expectations.
Outlook During the briefing to analysts,
management said it remained positive on the 4Q12 outlook as well as in
achieving its key KPI targets despite the continuous slower consumer banking prospect
in the region.
The key positive highlight from the briefing was that the
cash proceeds from its stake sales in Aviva would likely go to rewarding
shareholders. The group is targeting to complete the sale of Aviva by 1Q13 and
is highly likely to offer a one-off Dividend Reinvestment Plan to investors as
part of its capital management plan. This will also enable the group to comply
with BNM’s new consolidated supervision and capital framework.
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. We expect the
region’s economic growth to remain resilient over the next 2-3 years.
Change to Forecasts Maintaining our FY12-13E PAT estimates of
RM4,511.4m- RM4,820.1m for CIMB.
Rating MAINTAIN OUTPERFORM
Our OUTPERFORM rating on CIMB is maintained.
Valuation We are maintaining our target price at
RM8.20 being 2.0x the FY13 book value.
Risks Tighter lending rules and a margin squeeze.
Source: Kenanga
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