HLIB Research 17 Nov 2011 (AFG

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: HLG

Price Call: BUY

Target Price: 3.65

AFG (BUY)

Delivering The Goods

''  2QFY12 results above HLIB and consensus expectations due to continuednon-interest income growth and subdued credit charge.

''  Results show management gradually delivering its strategy withbroad-based non-interest income growth, acceleration in loans growth andimprovement in NIM.

''  Deposit franchise also continued to be strong (growth ahead of industryaverage) which will ensure healthy NIM.

''  Guiding for sustainable low credit charge.

''  Asset quality improvement unabated with ratios now better than industryand LLC above 100%, both for the first time.

''  Capital also robust and in top quartile.

''  Dividend quantum and payout ratio expected to increase.

''  Maintain Buy and target price of RM3.65.