Maybank (Buy) - CFS Briefing Reaffirms Our Positive View

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: HLG

Price Call: BUY

Target Price: 10.12

Maybank (Buy)

CFS Briefing Reaffirms Our Positive View

• Analyst briefing yesterday on its Community Financial Services (CFS 'which handles the retail, SME and business segments).   
• The briefing reaffirms our positive view about thecompany prospects as well as the positive impact on earnings (which has alreadyshown results) from its transformation.  
• Despite expectations of slower growth in2012 (vs. 2011), it is optimistic that momentum from the transformation wouldenable the group to outpace the industry.  
• New responsible lending guideline ' inline with internal practice and merely resulted in recalibrating the DSR fromgross to net pay basis.  Although Jan 12 numbers dropped by circa 20%, itcould be due to seasonal and Feb numbers have stabilized.
• Branch transformation (over three years)will not have significant impact on CIR given its aim of widening products andservices while some branches will be right-sized.
• Maintain Buy.
• Target price maintained RM10.12 based on Gordon Growthwith ROE of 15.6% and WACC of 9.9%.

Source: HLIB Research 9 March 2012