The Star Online: Business
The Star Online: Business |
- RHB Research maintains CIMB fair value at RM8.70
- Corporate results in brief
- UK banks should face threat of being broken up
| RHB Research maintains CIMB fair value at RM8.70 Posted: 20 Nov 2012 07:33 PM PST KUALA LUMPUR: CIMB Equities Research has maintained CIMB Group Holdings Bhd's fair value of RM8.70 based on a CY 13 price-to-earnings ratio (PER) of 13 times. It said on Wednesday CIMB's Q3, FY 2012 results were within its and consensus expectations, with nine-month net profit of RM3.26bil (up 13% on-year) accounting for 76% of its and consensus full-year net profit estimates. "Annualised pre-impairment operating profit was 3% below estimate, mitigated by annualised credit cost of 20 basis points (bps) versus our 40bps assumption," it said. RHB Research said the net profit of RM1.14bil, up 3% on-quarter and 13% on-year was led by stronger operating income (+7% on-quarter; +17% on-year). The group's net interest income rose 1% on-quarter (+15% on-year) on the back of continued loan growth, albeit by a slower pace. Group net interest margin was well managed, down just 2bps on-quarter (+10bps on-year) despite CIMB Niaga reporting an estimated 29bps on-quarter net interest margins (NIM) compression. "Non-interest income rose 19% on-quarter (+22% on-year) mainly due to: 1) higher gains from sale of AFS securities; 2) higher forex income from healthy customer flows and wider spreads due to volatile market conditions; and 3) share of gains from recovery of impaired loans (CIMB Thai). "Quarterly credit cost stayed low at 4bps (2Q12: 3bps; 3Q11: 6bps) thanks to a writeback in individual allowance as asset quality stayed intact. Overheads (+9% on-quarter; +18% on-year), however, faced upward pressure from higher personnel cost as the ex-RBS team started coming onboard. Thus, CIR deteriorated to 56.6% (2Q12: 55.5%; 3Q11: 56.1%)," it said. RHB Research said CIMB Group's gross loan growth moderated (3Q12: +8.6% on-year; +0.4% on-quarter versus 2Q12: +13.1% on-year; +5% on-quarter) with annualised loan growth of 6.5% below the 16% target. The slowdown was partly due to adverse foreign translation impact, which impacted on-year and on-quarter growth by an estimated 200-220bps. The overall impact, however, was shielded by NIM management and better non-interest income. Management also appeared optimistic that a strong deal pipeline in 4Q12 would help improve growth. Meanwhile, group customer deposits rose 2.3% on-quarter (+6.1% on-year) with CASA deposit growth of 1.3% on-quarter (+11.1% on-year). CASA ratio was broadly stable on-quarter at 34.6% (2Q12: 34.9%). "No change to our earnings forecasts. Fair value of RM8.70 (target CY13 PER of 13 times) and Trading Buy call are unchanged," it said. |
| Posted: 20 Nov 2012 07:25 PM PST Wednesday November 21, 2012KUALA LUMPUR: Results from KMN, QE Resources, Syarikat Takaful, Dailog, Alliance Financial Group, MPI, MRC and Kian Joo.
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| UK banks should face threat of being broken up Posted: 20 Nov 2012 07:16 PM PST LONDON: Britain's banks should be forced to fully separate their retail arms from investment banking operations if they try to circumvent new rules designed to protect the taxpayer, a top regulator warned. Andrew Bailey, head of banking supervision at the Financial Services Authority (FSA), said banks should face the threat of being broken up if they fail properly to omply with proposals to ring-fence retail deposits from riskier activities. Bailey said there was a risk that banks would try to "tunnel under" any ring-fence set for them. "This is an industry which is tremendously innovative at thinking of ways to dress things up to look slightly differently," Bailey told the Parliament Commission on Banking Standards. "It's not just the banks, they are supported by a very large army of advisers, lawyers, accountants who make very good money out of this business of being creative," he added. MPs are debating what should be allowed inside the ring-fence and Adair Turner, the FSA's chairman, said there was a case for retail banks to be allowed to sell simple derivative products to small companies, in an easing of initial proposals. The Parliamentary Commission on Banking Standards was set up to scrutinise the industry and examine proposals for reform following a raft of scandals including the rigging of interest rates. Reuters |
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