Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD
Research House: OSK
Company Name: MALAYAN BANKING BHD
Research House: OSK
OSK Research Sdn Bhd has maintained a "buy" call for Malayan Banking (Maybank) with a target price of RM10.07 based on its subsidiary, Bank Internasional Indonesia's (BII), profits contribution to the group.
OSK also said it was leaving its earnings estimates unchanged for now, pending the group's upcoming conference call for clarity on a high effective tax rate and an unusual 15 per cent quarter-on-quarter spike in operating expenses.
As at 12.28pm today, Maybank's share price stood at RM8.68.
In a research note here today, OSK said Maybank had set a three-year target for investment in BII, to break even against the funding cost that the group incurred in acquiring the bank.
"Judging purely from BII's reported financial year 2010 results, which reflect above-industry costs and credit charge off rates, the group may require 4.5 years to achieve this target," OSK added.
However, OSK noted that BII was aggressively expanding by new hiring and increasing its branch network by nearly 43 per cent over the next one-and-a-half years.
It also said the operating leverage will begin to flow from an expanded presence.
"This would naturally help bring down the cost to income ratio, closer to the industry average," it added. - BERNAMA
OSK also said it was leaving its earnings estimates unchanged for now, pending the group's upcoming conference call for clarity on a high effective tax rate and an unusual 15 per cent quarter-on-quarter spike in operating expenses.
As at 12.28pm today, Maybank's share price stood at RM8.68.
In a research note here today, OSK said Maybank had set a three-year target for investment in BII, to break even against the funding cost that the group incurred in acquiring the bank.
"Judging purely from BII's reported financial year 2010 results, which reflect above-industry costs and credit charge off rates, the group may require 4.5 years to achieve this target," OSK added.
However, OSK noted that BII was aggressively expanding by new hiring and increasing its branch network by nearly 43 per cent over the next one-and-a-half years.
It also said the operating leverage will begin to flow from an expanded presence.
"This would naturally help bring down the cost to income ratio, closer to the industry average," it added. - BERNAMA
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