Period 3Q12/9M12
Actual vs. Expectations
The 9M12 PAT of
RM4,285.1m came in broadly inline with expectations, making up 80% of the
consensus’ forecast and 82% that of ours. The revenue growth was, however,
softer in 3Q12 although the continuing improvement in the credit charge-off
rate brought the steady bottom line result.
Dividends No
dividend was proposed during the quarter.
Key Result Highlights
The 3Q12 net interest income grew
steadily by 2.5% QoQ and 12.4% YoY to RM2,158.9m. The NIM was higher by 1bps to
2.41% given the softer 10.4% loan growth (on an annualised basis) during the
quarter.
The loan growth
momentum was softer due to the tighter market in the region. The 10.4% loan
growth was hence below its FY12 KPI target of 16.2%. The slower loan demand in Singapore and just
stable growth in Malaysia were the key reasons for the unexciting loan growth.
The domestic loan grew 12.4% (on an annualised basis, 2Q12: 15.8%).
Besides the softer
funding business, we also note that the 3Q12 non-interest incomes of RM1,975.6m
were softer too by -5.1% QoQ after a strong 1H12 performance. However, the 9M12 non-interest incomes of
6,086.5m were still considerably strong (+16.6% YoY) thanks to 1) stronger Kim
Eng’s contributions, 2) transfer profits from the surplus in the insurance
division and 3) a better fee-based incomefrom the strong issuance of Islamic
debt securities. As a result, the group’s total income grew 14.8% YoY with fee-based
incomes contributing 38.7% of the total income.
The 3Q12 overhead
cost of RM2.04b was flat but with the lower total income, the cost-to-income
ratio was higher at 49.4% (vs. 46.9% in 2Q12).
The NPL outstanding
balance of RM5.8b was lower in 3Q12 (from RM6.0b in 2Q12) with the net
impairment ratio improving 6bps QoQ to 1.22%. The annualised credit charged-off
rate is estimated at only 23bps to gross loans. Loan loss coverage meanwhile
was recorded at 104%.
In summary, the
annualised 16.3% ROE has exceeded the group’s 15.6% target.
Outlook During
the briefing, the management said it remained confident of their profit
guidance for Malaysia and that Indonesia’s strong domestic demand will continue
to do well. The above factors should continue to support Maybank’s balance
sheet growth and profitability despite the softer momentum in our view.
Change to Forecasts There are no changes to our earnings
estimates.
Rating Maintain OUTPERFORM
Our OUTPERFORM rating
is maintained as the current share price implies a 21% total upside (together
with a 5.0% net div. yield) to our Target Price (TP).
Valuation Our
Target Price of RM10.40, based on 2.0x FY13 P/BV and implying a 14.9x FY13 PER,
is retained.
Risks Unexpected slowdown in fee incomes.
Source: Kenanga
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