AMMB Holdings - Better cover through M&A

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: CIMB

Price Call: HOLD

Target Price: 6.22

Target RM6.22

AMMB's AmG Insurance will emerge as the largest general insurer in Malaysia following its acquisition of Kurnia Insurans, which was sealed by the execution of S&P agreement yesterday. The deal will provide cost synergies and cross-selling opportunities in longer term. But the earnings accretion for AMMB will initially be minimal at only about 1% for FY3/14. We retain our valuation basis of 10% discount to DDM value and Neutral rating given the below-industry loan growth.

Source: CIMB Daybreak - 13 April 2012, Full PDF Report