Business

Kenanga raises Maybank’s target price

February 22, 2013

KUALA LUMPUR, Feb 22 — Kenanga Research raised its target price on the country’s largest bank Malayan Banking Berhad to RM10.90 a share from RM10.40 on the back of strong earnings in 2012.

Maybank, Southeast Asia’s fourth-biggest lender by assets, yesterday reported its October-December quarterly profit rose 16 per cent to RM1.46 billion, bolstered by higher net loans, advances and fee income.

But Maybank’s unexciting loan growth of only 12.9 per cent y/y in the fourth quarter was due to slower loan demand in Singapore and tighter markets in the region, Kenanga said in a note today.

Kenanga added that the bank’s issuance of 415 million new shares in October last year, which raised RM3.7 billion, signalled that Malaysian banks were feeling the regulatory pressure to boost their capitals as they expanded regionally.

“We think Maybank’s equity issuance was a positive move that removes a dilution overhang that still remained in place for its government-linked company peers, CIMB Group,” Kenanga said.

Kenanga kept its “outperform’ rating on the stock.

Maybank’s shares rose 0.67 per cent. The Malaysian benchmark stock index crept up 0.04 per cent. — Reuters

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