March 28, 2011

PBBANK - Maybank IB Research maintains Hold on Public Bank, TP RM14.10

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD
Research House: MAYBANK

KUALA LUMPUR: Maybank Investment Bank Research (Maybank IB Research) said it is maintaining a Hold on Public Bank with an unchanged DDM-derived TP of RM14.10 (payout ratio: 52%, cost of equity: 10.6%, terminal growth rate: 5%).

It said on Monday, March 28 the key takeaway from a recent Public Bank visit is that lending momentum remains very much intact on the consumer front, but that rate competition for both loans and deposits is unlikely to ease anytime soon.

'Our earnings forecasts are broadly maintained. While we like the stock for its solid fundamentals, much is reflected in the current share price (prospective 2011 P/BV of 3x, ROE: 23.9%) we believe, and we see little catalyst in the near term,' it said.

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