||Asean Affairs 5 June 2013
CIMB Research advises investors to accumulate Maybank shares
KUALA LUMPUR: CIMB Equities Research advises investors to accumulate shares of Malayan Banking Bhd (Maybank) which is its top pick for the banking sector given its rapid growth in Indonesia.
“Other catalysts would include the regional expansion of its investment banking business and benefits from the implementation of ETP (Economic Transformation Programme) projects in Malaysia,” it said on Tuesday.
CIMB Research said Maybank's management thinks Bank Internasional Indonesia (BII) will contribute more than 10% of Maybank's earnings by 2015.
“This reaffirms our expectation of a swift expansion of BII earnings. It also anticipates BII's ROE to expand from 13% in 2012 to 16% in 2015,” it said.
The research house said to achieve an assumed target of 12% contribution from BII to Maybank's profit before tax (PBT) by 2015 (versus 8.8% in 2012), BII's PBT needs to record a 21% CAGR in FY12-FY15.
“We think this is achievable given its strong loan growth and margins. Reiterate Outperform on Maybank, based on strong growth in the region,” said CIMB Research, which is maintaining its target price of RM12.10.