Hong Leong Bank (2QFY12 Results): In line with consensus

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 11.50

Maintain HOLD, TP: RM11.50

2QFY12 results were in line with market expectations. Y-o-y comparisons are meaningless because 1HFY12 earnings consolidated EON Bank which was absent in the previous year. With the completion of its rights issue, core capital ratio recovered to a comfortable 11.5%. A higher interim dividend was proposed but although we have raised our forecast dividends, payout ratio is expected to remain low. We maintain our EPS forecasts, target price and HOLD recommendation, although HLB remains our top pick amongst the Malaysian banks for its growth potential post-merger. (refer to report for details)

Source: ECM Newz Bits 28 February 2012, PDF Report