Amresearch is maintaining its Buy recommendation on MALAYAN BANKING BHD.
“We have rolled forward our fair value to FY12F, from FY11F. Our new fair value is RM9.90/share (versus RM10.30/share previously),” it said on Tuesday, Sept 13.
AmResearch said this is based on our revised returns on equity for FY12F of 14.8% (15.1% previously) leading to fair price-to-book value of 2.1 times (2.3 times previously).
The research house said based on its recent company visit, Maybank indicated that there have been no major negative trends so far in terms of asset quality, and is maintaining its credit costs guidance at 30bps to 40bps. It further alluded that if credit costs were to go beyond 50bps, profitability would be affected.
“We are not changing our 50bps credit cost for FY11F. For FY12F, we have raised our credit cost assumption to 52bps, from 45bps previously. The key concern currently is still the knock-on effects from external uncertainties, particularly on credit costs, in our view,” it said.
Written by theedgemalaysia.com
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