FW: AmBank Research - RHB Bank : Stable net interest margin BUY, 28 Nov 2017

 

 

STOCK FOCUS OF THE DAY         

RHB Bank : Stable net interest margin                                                                                     BUY

 

We maintain our BUY call on RHB Bank with an unchanged fair value of RM6.00/share. Our fair value is based on FY18F ROE of 9.1% leading to unchanged P/BV of 1.0x. No change to our earnings forecast. 3QFY17 net profit was RM489mil (-2.4%QoQ: -3.3%YoY). On a QoQ basis, earnings were flat with a higher total income,offset by an increase in operating expenses (OPEX) and provisions for loan losses. 

 

The group reported a profit of RM1.49bil (+4.9%YoY) for 9MFY17, supported by higher net fund-based income and lower impairment on securities, but partially offset by a decline in net non-fund based income and rise in OPEX. Cumulative earnings were within expectations, making up 72.2% of our and 73.7% of consensus estimates respectively. Annualised ROE for 9MFY17 of 8.9% was close to our estimate of 9.1% for the full FY17. NIM was stable at 2.19% in 3QFY17. This was due to group's management of funding cost which saw the redemption of its sub-debts and senior notes in 2QFY17. No dividends have been proposed in 3QFY17.

 

Others :

Cocoaland Holdings : 3Q17 results fall in line                                                                        HOLD

Digi.Com : Digitalisation for new business propositions                                                   HOLD

UMW Oil & Gas : Watch for year-end restructuring costs and impairments            HOLD

 

 

QUICK TAKE

Bursa Malaysia : Proposes bonus issue and new employee share grant plan         HOLD

 

 

ECONOMIC HIGHLIGHT

Thematic/Strategy : Are we seeing hints of a slowdown?

 

 

NEWS HIGHLIGHTS

Property Sector : Moody’s warns of material decline in property prices

LBS Bina : Earnings up 26%

Glomac : 2Q net profit down 92% on absence of government grant

IHH : Likely to face cost pressure in the near term

 

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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