PP 7767/09/2010(025354)

30 August 2010
RHB Research

Malaysia
Corporate Highlights Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

S e cto r Upd at e
30 August 2010
MARKET DATELINE
Recom : Overweight
Banking (Maintained)

Jul ‘10 System Data – Monthly Applications Still

Strong Despite OPR Hikes

Table 1: Sector Valuations

PER (x) EPS gwth (%) P/BV (x) ROE (%) Net Div Yld (%)
Price
FY10 FV FY11Rec FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11
Maybank 8.2615.39.8613.3OP 42.6 14.7 2.1 1.9 14.5 15.0 5.0 3.2
CIMB 7.7416.18.4013.8OP 20.8 17.2 2.2 2.0 15.2 15.1 1.2 1.2
Public Bank - L 12.14 13.75
14.8 13.2OP 11.8 11.8 3.4 3.0 24.2 23.8 3.7 4.0
AMMB^ 5.5613.36.9511.6OP 20.8 14.1 1.6 1.4 12.5 13.0 2.7 3.0
HLB 8.95 10.70
13.1 12.6OP 9.1 3.9 2.2 2.0 16.3 15.1 2.0 2.0
Affin 3.04 9.44.10 8.8OP 30.1 6.4 0.9 0.8 9.8 9.6 2.1 2.1
AFG^ 3.0512.23.5011.2OP 28.9 9.0 1.4 1.3 12.5 12.3 2.1 2.1
EON Cap 6.9011.48.33 9.9MP 23.5 14.3 1.2 1.1 11.3 11.6 1.4 1.4
RHB Cap* 6.6210.3 NR 9.5NR 14.3 9.4 1.5 1.3 14.8 14.9 2.6 2.8
Sector Wt. Avg 14.5 12.8 24.1 13.4 2.2 2.0 16.4 16.4 3.0 2.6
*Not under coverage. Forecasts based on IBES estimates ^FY10-11 valuations refer to those of FY11-12

♦ Jul ‘10 banking system loan growth at 11.9% yoy. Jul ’10 loan
Chart 1. Industry NPL
(RMm) Gross NPL (LHS) Gross NPL ratio (RHS) Net NPL ratio (RHS) (%)
growth moderated slightly to +11.9% yoy vs. +12.5% yoy in Jun ’10. 69,000
1

This was largely due to lower disbursements during the month, especially 64,000 1

to the business segment. The household segment saw outstanding loans 59,000 1

accelerate further to +13.2% yoy (vs. Jun ’10: +12.9% yoy) with growth 54,000
1

49,000
still broad-based. 9
44,000
7

♦ Monthly applications picked up but approvals moderated. Jul ’10

39,000

34,000
5

loan applications rose further to RM58.4bn (+13.6% yoy; +9.9% mom), 3

29,000
a new high for the banking system. Absolute loan approvals, meanwhile, 24,000 1
moderated to RM28.9bn (+7.9% yoy) vs. RM33.3bn (+24.2% yoy) in Jun Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10

’10. Jul’s statistics suggest that demand for loans has not been dampened Chart 2. Industry LLC
by the three hikes in the Overnight Policy Rate (OPR) by BNM thus far.
(%)
100

95

Looking ahead, we think loan growth may moderate due to a higher base 90

effect and/or a pick-up in capital market fund raising activities. Thus, our
85

80

2010 loan growth projection for the banking system remains at +10-11%. 75

70

65

♦ Industry asset quality. Absolute gross impaired loans/NPLs, individual 60

55

and collective impairment provisions as at end-Jul ‘10 were broadly stable 50

45

mom. Consequently, according to BNM, Jul ‘10 system-wide three-month 40

net non-performing loan (NPL) ratio remained stable at 2.2% (Jun ‘10:
35
9 0 1 2 3 4 5 6 7 8 9 0
9
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 1
-
n n n n n n n n n n n n

2.2%).
a
J a
J a
J a
J a
J a
J a
J a
J a
J a
J a
J a
J

♦ ALR higher while spread stable. Commercial banks’ ALR in Jul ‘10
trended higher by 14bps to 5.19% (vs. 5.05% in Jun ‘10) following the
25bps increase in OPR during the month. The 3-month overnight
interbank rate kept pace, moving higher by 13bps to 2.88% (Jun: 2.75%)
and as a result, interest spread remained broadly stable at 2.3%.

♦ LD and capital ratios. Liquidity remains ample while industry capital

ratios were broadly stable and healthy with the core capital ratio and
RWCR at 13.2% (Jun ‘10: 13.1%) and 15.1% (Jun ‘10: 15%)
respectively.

♦ Investment case. Jul’s numbers has helped support our positive stance
on the sector. The enlarged loan base from the growth thus far should be
felt in 2H2010 while the strong application pipeline would be supportive of
loan growth ahead. This would be further aided by the OPR hikes that
David Chong, CFA
have taken place thus far. We are maintaining our Overweight rating on
(603) 9280 2186
the sector. We like Maybank, CIMB, AMMB and Public Bank for an
david.chong@rhb.com.my
exposure to large cap banking stocks. HL Bank, Affin and AFG are also
rated as Outperform while EON Cap is rated Market Perform.

Please read important disclosures at the end of this report.

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Industry Loan Growth And Leading Indicators

♦ Jul ‘10 banking system loan growth – up 11.9% yoy. Jul ’10 loan growth moderated slightly to +11.9%
yoy vs. +12.5% yoy in Jun ’10. This was largely due to lower disbursements during the month, especially to the
business segment for working capital (manufacturing and wholesale & retail trade, and restaurants & hotels
segments). The household segment saw outstanding loans accelerate further to +13.2% yoy (vs. Jun ’10:
+12.9% yoy) with growth still broad-based, i.e. purchase of residential and non-residential properties,
passenger cars, personal use and credit cards.

♦ Monthly applications picked up but approvals moderated. Jul ’10 loan applications rose further to
RM58.4bn (+13.6% yoy; +9.9% mom), a new high for the banking system. In terms of applications by purpose,
the growth was underpinned by applications for the purchase of residential and non-residential properties.
Applications for construction and working capital purposes also helped contribute to the growth. Absolute loan
approvals, meanwhile, moderated to RM28.9bn (+7.9% yoy) vs. RM33.3bn (+24.2% yoy) in Jun ’10. Approvals
for working capital loans remained healthy (+28.6% yoy), as did loan approvals for consumer loans such as
purchase of passenger cars, residential and non-residential properties and personal loans.

♦ Leading indicators still holding firm despite three rate increases. Despite three OPR hikes that have
taken place thus far, this does not appear to have dampened demand for loans (especially given the new high
achieved for loan applications). Nevertheless, we think loan growth ahead may moderate due to a higher base
effect and/or a pick-up in capital market fund raising activities. Thus, we are keeping our 2010 loan growth
projection for the banking system unchanged at +10-11%.

♦ Still positive for banks. Jul’s numbers has helped support our positive stance on the sector. The enlarged loan
base from the growth thus far should be felt in 2H2010 while the strong application pipeline would be supportive
of loan growth ahead. This would be further aided by the three OPR hikes that have taken place thus far and
taken together, we see these factors providing support to earnings momentum in 2H2010.

Table 2 : Loan Composition By Type Of Customers As At End-Jun ‘10

Maybank CIMB Grp PBB RHB AMMB HLB EONC Affin AFG
% % % % % % % % %
Loan composition
- Individuals 50.0 46.8 62.2 43.4 61.0 66.2 59.6 42.4 56.5
- SMEs 9.6 14.8 18.0 15.0 11.4 8.7 20.9 26.9 22.1
- Corporates & others 40.4 38.4 19.8 41.6 27.6 25.1 19.5 30.7 21.4

Loan growth for quarter-ended 30 Jun 2010

- QoQ 4.2 5.1 3.7 4.1 1.7 3.2 4.3 4.8 0.7
- YoY 11.0 17.7 14.1 17.6 12.4 8.3 12.9 15.4 7.9
Source : Companies, RHBRI

Chart 3 : Annual Loan Growth Chart 4 : Total Loans & Growth (Residential Property)
(RMbn) Loan (RMbn - LHS) Loan Growth (% yoy - RHS) (%) (RMbn) (%)
850 Residential property (LHS) % yoy (RHS)
230 12
800 12
220
750 11
10 210
700
200
10
650 8
190
600
9
180
6
550
170
500 8
4 160
450
150 7
400 2
Apr 2006 2007 2008 2009 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: BNM Source: BNM

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 30 August 2010

Chart 5 : Total Loans & Growth (Non-Residential Property) Chart 6 : Total Loans & Growth (Transport Vehicles)
(RMbn) (%) (RMbn) Transport vehicles (LHS) % yoy (RHS) (%)
85 Non-residential property (LHS) % yoy (RHS) 23 130 10
22
80
21 125 9
75
20
120 8
70 19
18 115 7
65
17
60 110 6
16
55 15
105 5
14
50
13
100 4
45
12
40 11 95 3
Apr 2006 2007 2008 2009 2010 Apr 2006 2007 2008 2009 2010

Source: BNM Source: BNM

Chart 7 : Total Loans & Growth (Personal Use) Chart 8 : Total Loans & Growth (Credit Card)
(RMbn) Personal use (LHS) % yoy (RHS) (%) (RMbn) Credit card (LHS) % yoy (RHS) (%)
44 22
27 21
42
20
40 19
38 18 25
17
36
16 23
34 15
32 14 13
21
30
12 11
28 19
26 10 9
24 17
8 7
22
20 6 15 5
Apr 2006 2007 2008 2009 2010 Apr 2006 2007 2008 2009 2010

Source: BNM Source: BNM

Chart 9 : Total Loans & Growth (Working Capital) Chart 10 : Total Loans & Growth (Others)
(RMbn) Working capital (LHS) % yoy (RHS) (%) (RMbn) (%)
230 50 Others (LHS) % yoy (RHS) 60
16
50
220 14 45
40
210 12
30
40
10
20
200
8
35 10
190 6
0
4 30
180 -10
2 -20
170 25
0 -30
160 -2 20 -40
Apr 2006 2007 2008 2009 2010 Apr 2006 2007 2008 2009 2010

Source: BNM Source: BNM

Chart 11 : Industry Loan Applications* Chart 12 : Industry Loan Approvals*

(RMbn) 3-mth moving average (RMbn - LHS) % yoy (RHS) (RMbn) (%)
(%) 3-mth moving average (RMbn - LHS) % yoy (RHS)
31 80
60 80
29 70
55 60
27
60
50 50
25
40
45 40 23
30
21
40 20
20 19
10
35
17
0
30 0 15
-10
13 -20
25
-20 11 -30
20
9 -40
15 -40 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2005 2006 2007 2008 2009 2010

*Based on 3-month moving average *Based on 3-month moving average

Source: BNM Source: BNM

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 30 August 2010

Industry Asset Quality

♦ Industry asset quality. Absolute gross impaired loans/NPLs, individual and collective impairment provisions as
at end-Jul ‘10 were broadly stable mom. Consequently, according to BNM, Jul ‘10 system-wide three-month net
non-performing loan (NPL) ratio remained stable at 2.2% (Jun ‘10: 2.2%).

Chart 13 : Industry Asset Quality*

(RMm) Gross NPL (LHS) Gross NPL ratio (RHS) Net NPL ratio (RHS) (%)
17
69,000

64,000 15

59,000 13

54,000
11
49,000
9
44,000
7
39,000
5
34,000

29,000 3

24,000 1
Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10
* Reflects 3-month NPL classification method and GP8 adjustment (excluding-IIS) In addition, beginning Jan 2010, loans are reported
based on FRS139. The adoption of FRS139 is based on the FYE of the banks.
Source: BNM

Chart 14 : Industry LLC Chart 15 : Industry Absolute Gross NPL & Net NPL Ratio
(%) (RMm)
100 (%)
Gross NPL - mom chg (RMm) Net NPL ratio (%)
95 11
2,000
90

85

80 9
1,000
75

70
7
65 -
Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09
Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10
60

55 5
(1,000)
50

45

40 (2,000) 3

35
Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

(3,000) 1

Source: BNM Source: BNM

Industry Deposit Growth And LD Ratio

♦ Jul ‘10 deposits flat mom ... Absolute amount of deposits as at end-Jul ‘10 was flattish mom (+8.7% yoy)
with higher deposit placements by individuals offset by the drop in deposits from corporates as well as
government bodies. We also note a shift from demand deposits (-3% mom) into fixed deposits (0.7% mom),
possibly a reflection of the upward adjustments in FD rates due to the OPR increase.

♦ … leading to LD ratio rising further. Given that mom loan growth outpaced deposit growth, Jul ‘10 loan-
deposit (LD) ratio increased to 77.5% (Jun ‘10: 76.9%, based on RHBRI computation). As compared to historical
LD ratio levels, the system’s liquidity remains ample.

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♦ LD ratios of individual banks generally healthy. Generally, apart from AMMB and EON Cap, the LD ratio for
the individual banks appears to be at comfortable levels. While AMMB has the highest LD ratio among the banks,
we do note that, historically, this ratio tends to be >100% mark. As for EON Cap, 2Q deposit growth stood at a
healthy annualised rate of 20.3% thanks to innovative deposit campaigns and this should help support loan
growth, if sustained.

Chart 16 : Annual Deposit Growth Chart 17 : LD Ratio

(RMbn) Deposit (RMbn - LHS) Deposits Growth (% yoy - RHS) (%) 105%

1100 25
100%

1000
20 95%
900

90%
15
800

85%
700
10

600 80%

5
500 75%

400 0
70%
2002 2003 2004 2005 2006 2007 2008 2009 2010 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: BNM Source: BNM

Table 3 : Loan/Deposit Ratio As At End-Jun ‘10

Maybank CIMB Grp PBB RHB AMMB HLB EONC Affin AFG
% % % % % % % % %
LD Ratio 86.8 78.6 83.2 82.2 95.9 54.1 91.9 80.3 89.6
Source : Companies

Industry Average Lending Rate (ALR)

♦ Interest spread stable as both ALR and interbank rates moved up following OPR increase. Commercial
banks’ ALR in Jul ‘10 trended higher by 14bps to 5.19% (vs. 5.05% in Jun ‘10) following the 25bps increase in
OPR during the month. The 3-month overnight interbank rate kept pace, moving higher by 13bps to 2.88%
(Jun: 2.75%) and as a result, interest spread remained broadly stable at 2.3%.

Chart 18: Industry ALR & Spread Chart 19 : Industry Capital Ratios
(%) (%) (%) (%)
7.5 Avg. Lending Rate (LHS) Interest Spreads (RHS) 4.5 16.0 RWCAR (LHS) Core capital ratio (RHS) 14.0
13.5
7.0 13.0
4.0 15.0
12.5
6.5 12.0
14.0
3.5 11.5
11.0
6.0
13.0 10.5
3.0 10.0
5.5
9.5
12.0
9.0
2.5
5.0 8.5
11.0
8.0
4.5 2.0 7.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10.0 7.0
92 98 99 00 01 02 03 04 05 06 07 08 09 10

Source: BNM Source: BNM

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Industry Capital Ratios

♦ Capital ratios broadly stable. Industry capital ratios were broadly stable and healthy with the core capital
ratio and RWCR at 13.2% (Jun ‘10: 13.1%) and 15.1% (Jun ‘10: 15%) respectively.

RISKS

♦ The risks include: 1) slower-than-expected loan growth; 2) deterioration in asset quality; and 3) changes in
market conditions that may adversely affect investment portfolio.

CHANGES TO FORECASTS

♦ No changes to our earnings forecasts for the banks.

VALUATIONS AND RECOMMENDATION

♦ Banking sector the best proxy to the economic recovery. In our view, the banking sector represents the
best proxy to the economic recovery and we continue to believe that the sector will help take the lead in lifting
the market to higher grounds. We expect this to be underpinned by factors such as: 1) earnings growth gaining
momentum; 2) valuations remain decent relative to the market and historical levels; and 3) relatively low
foreign shareholding levels.

♦ Maintain Overweight on the sector. Overall, we maintain our Overweight stance on the sector. For an
exposure to the big cap banking stocks, we like Maybank, CIMB Group, Public Bank and AMMB while HL Bank,
AFG and Affin are our picks within the mid-smaller market capitalisation segment.

Table 4 : Valuation Bases

Fair Value
Company (RM/share) Valuation Methodology
Affin 4.10 12x CY11 EPS, 3x discount to reflect its smaller market capitalisation
AFG 3.50 13x CY11 EPS, 2x discount to reflect its smaller market capitalisation
AMMB 6.95 Benchmark 15x CY11 EPS
CIMB Group 8.40 Benchmark 15x CY11 EPS
EON Cap 8.33 13x CY11 EPS, 2x discount to reflect its smaller market capitalisation
HL Bank 10.70 Benchmark 15x CY11 EPS
Maybank 9.86 Benchmark 15x CY11 EPS
Public 13.75 Benchmark 15x CY11 EPS
Source: RHBRI

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Table 5: IndustryNPLs
NPLs (3-month recognition, inclusive of IIS)
Month Gross NPLs Net NPLs Gross Ratio Net Ratio
(RMm) (RMm) (%) (%)
Aug-06 53,338 29,617 9.1 5.3
Sep-06 52,219 28,557 8.9 5.1
Oct-06 52,010 28,538 8.8 5.0
Nov-06 51,743 28,110 8.7 4.9
Dec-06 50,391 27,360 8.5 4.8
Jan-07 50,276 26,476 8.4 4.6
Feb-07 50,111 26,824 8.4 4.7
Mar-07 49,631 25,645 8.3 4.4
Apr-07 49,303 25,174 8.2 4.3
May-07 49,086 24,871 8.1 4.3
Jun-07 46,641 23,969 7.6 4.1
Jul-07 46,505 23,412 7.4 3.8
Aug-07 45,583 22,389 7.2 3.6
Sep-07 44,074 21,676 6.8 3.5
Oct-07 43,912 21,349 6.8 3.4
Nov-07 43,288 20,666 6.6 3.3
Dec-07 41,763 20,011 6.5 3.2
Jan-08 41,524 19,648 6.4 3.1
Feb-08 41,751 20,189 6.4 3.2
Mar-08 40,440 19,028 6.1 3.0
Apr-08 39,530 18,482 5.9 2.9
May-08 37,871 18,414 5.6 2.8
Jun-08 36,977 17,550 5.4 2.6
Jul-08 36,712 17,091 5.3 2.5
Aug-08 36,815 17,187 5.2 2.5
Sep-08 36,059 16,660 5.1 2.4
Oct-08 36,330 16,878 5.1 2.4
Nov-08 35,886 16,780 5.0 2.4
Dec-08 34,983 15,889 4.8 2.2
Jan-09 34,856 15,811 4.8 2.2
Feb-09 34,882 15,864 4.8 2.2
Mar-09 33,592 16,033 4.6 2.2
Apr-09 33,706 16,076 4.6 2.2
May-09 33,991 15,934 4.6 2.2
Jun-09 33,312 15,791 4.5 2.2
Jul-09 33,180 15,057 4.4 2.1
Aug-09 33,579 15,541 4.4 2.1
Sep-09 33,890 15,949 4.4 2.1
Oct-09 33,488 15,606 4.4 2.1
Nov-09 29,736 14,538 3.8 1.9
Dec-09 28,693 13,788 3.7 1.8
Jan-10* 28,222 13,203 3.6 1.7
Feb-10 29,445 14,796 3.7 1.9
Mar-10 29,160 15,367 3.6 1.9
Apr-10 29,272 17,040 3.6 2.1
May-10 30,060 18,100 3.7 2.2
Jun-10 29,973 17,718 3.6 2.2
Jul-10 29,871 15,042 3.5 2.2
*Beginning Jan 2010, loans are reported based on FRS139. The adoption of FRS139 is
based on the FYE of the banks.
Source : BNM

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Table 6 : Key Earnings Data

Maybank CIMB Grp PBB - L AMMB HLB EONC Affin AFG
Pre-provision Profit (RMm)

FY09a 6,437 4,875 4,000 1,986 1,147 585 670 377

FY10F 7,039 5,521 4,465 2,187 1,222 736 730 610
FY11F 7,632 6,241 4,871 2,375 1,269 799 794 664

Net Profit (RMm)

FY09a 3,818 2,807 2,517 1,009 988 341 372 301
FY10F 4,381 3,520 2,872 1,264 1,027 421 484 389
FY11F 4,925 4,124 3,212 1,442 1,051 481 514 423

Net Profit Growth (%)

FY09a 75.1 43.8 (2.5) 17.2 9.1 155.0 27.0 31.6
FY10F 14.7 25.4 14.1 25.3 3.9 23.5 30.1 28.9
FY11F 12.4 17.2 11.8 14.1 2.3 14.3 6.4 9.0

Adjusted Net Interest Margins (%)

FY09a 2.87 3.43 2.38 3.11 2.00 2.65 2.72 2.82
FY10F 2.86 3.41 2.36 2.98 1.98 2.67 2.64 2.94
FY11F 2.86 3.38 2.35 2.99 1.94 2.59 2.60 2.96

Non-Interest Income As % of Total Income

FY09a 36.1 35.1 22.6 31.3 24.1 19.9 23.9 7.4
FY10F 35.4 33.8 22.1 34.3 24.3 20.1 23.4 19.6
FY11F 34.7 33.5 21.7 34.4 24.4 20.4 23.0 19.8

Cost-to-Income Ratio (%)

FY09a 49.9 54.0 34.5 49.0 44.4 58.9 47.4 59.5
FY10F 49.1 53.3 33.4 47.6 44.1 53.5 46.5 47.1
FY11F 48.6 51.4 32.8 47.0 44.3 52.7 45.6 46.2

Loan-to-Deposit Ratio (%)

FY09a 86.8 79.5 79.2 94.0 54.1 92.9 78.7 87.4
FY10F 86.9 75.3 82.1 92.5 54.2 92.0 82.7 87.8
FY11F 87.9 75.0 83.6 91.7 54.2 92.1 82.8 87.1

Loan Growth (%)

FY09a 10.2 20.9 18.8 12.0 8.5 8.3 12.9 10.0
FY10F 10.0 10.3 14.0 7.6 7.1 14.8 16.0 8.5
FY11F 8.0 9.4 10.0 7.0 7.0 9.1 10.1 7.2

Gross NPL Ratio (%)

FY09a 2.9 5.0 1.0 2.8 1.9 3.8 3.7 3.8
FY10F 2.9 7.0 0.9 3.5 1.8 3.8 3.5 3.5
FY11F 2.7 6.5 0.9 3.3 1.7 3.3 3.3 3.3

Net NPL Ratio (%)

FY09a 1.1 1.8 0.8 1.5 1.2 2.3 2.2 1.8
FY10F 1.3 4.1 0.8 2.8 1.2 2.9 3.0 2.0
FY11F 1.2 4.0 0.7 2.7 1.1 2.5 2.9 1.9

Loan Loss Cover (%)

FY09a 124.5 90.8 172.4 99.5 117.4 78.5 81.5 94.4
FY10F 118.9 78.2 181.0 96.6 119.0 81.3 66.4 87.9
FY11F 122.5 76.2 191.6 98.3 125.0 89.9 65.5 90.2

RWCAR (%)
FY09a 14.7 14.4 14.2 15.8 15.5 14.4 13.8 15.7
FY10F 14.9 15.2 14.5 17.1 9.7 14.8 13.6 14.8
FY11F 15.0 14.9 14.3 17.1 10.2 15.0 13.3 15.6
Source : RHBRI – for companies with FYE Mar & Jun, FY09, FY10F and FY11F refers to FY10, FY11 and FY12 respectively

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Table 7 : Valuation Summary

Maybank CIMB Grp PBB - L AMMB HLB EONC Affin AFG
Bloomberg Ticker MAY MK CIMB MK PBK MK AMM MK HLBK MK EON MK AHB MK AFG MK
Recommendation OP OP OP OP OP MP OP OP

EPS (sen)
FY09a 53.9 39.8 73.3 34.7 68.1 49.2 24.9 19.5
FY10F 61.9 48.0 82.0 41.9 70.8 60.8 32.4 25.1
FY11F 69.6 56.3 91.7 47.8 72.5 69.4 34.4 27.3

EPS growth (% y-o-y)

FY09a 42.6 37.5 (4.7) 9.8 9.1 155.0 27.0 30.6
FY10F 14.7 20.8 11.8 20.8 3.9 23.5 30.1 28.9
FY11F 12.4 17.2 11.8 14.1 2.3 14.3 6.4 9.0

PER (x)
FY09a 15.3 19.5 16.6 16.0 13.1 14.0 12.2 15.7
FY10F 13.3 16.1 14.8 13.3 12.6 11.4 9.4 12.2
FY11F 11.9 13.8 13.2 11.6 12.3 9.9 8.8 11.2

BVPS (RM/s)
FY09a 3.94 2.88 3.12 3.20 4.07 5.13 3.17 1.90
FY10F 4.29 3.54 3.60 3.52 4.54 5.66 3.43 2.11
FY11F 4.70 3.92 4.04 3.85 5.03 6.28 3.71 2.34

P / BV (x)
FY09a 2.1 2.7 3.9 1.7 2.2 1.3 1.0 1.6
FY10F 1.9 2.2 3.4 1.6 2.0 1.2 0.9 1.4
FY11F 1.8 2.0 3.0 1.4 1.8 1.1 0.8 1.3

ROE (%)
FY09a 14.5 15.0 24.5 11.6 16.3 10.1 8.1 10.6
FY10F 15.0 15.2 24.2 12.5 15.1 11.3 9.8 12.5
FY11F 15.5 15.1 23.8 13.0 13.9 11.6 9.6 12.3

ROE / PBV (x)

FY09a 6.9 5.6 6.3 6.7 7.4 7.5 8.5 6.6
FY10F 7.8 7.0 7.2 7.9 7.7 9.2 11.1 8.7
FY11F 8.8 7.6 7.9 9.0 7.8 10.6 11.8 9.4

ROA (%)
FY09a 1.2 1.3 1.2 1.1 1.2 0.8 1.0 1.0
FY10F 1.2 1.4 1.3 1.3 1.2 0.9 1.1 1.2
FY11F 1.3 1.4 1.3 1.3 1.1 0.9 1.1 1.2

Net DPS (sen)

FY09a 41.3 9.3 41.3 9.4 18.0 0.0 6.4 6.4
FY10F 26.3 9.3 45.0 14.8 18.0 10.0 6.4 6.4
FY11F 29.3 9.3 48.8 16.8 18.0 10.0 6.4 6.4

Net dividend yield (%)

FY09a 5.0 1.2 3.4 1.7 2.0 0.0 2.1 2.1
FY10F 3.2 1.2 3.7 2.7 2.0 1.4 2.1 2.1
FY11F 3.5 1.2 4.0 3.0 2.0 1.4 2.1 2.1
For companies with FYE Mar & Jun, FY09, FY10F and FY11F refers to FY10, FY11 and FY12 respectively
Source : RHBRI

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 30 August 2010

Chart 20: PBBank Technical View Point

♦ The share price of PBBank began its uptrend in Mar
2009.

♦ It reached a tough resistance near RM10.30 in Nov

2009 to start a sideways trend, until it removed the
level convincingly in late Dec 2009.

♦ Thereafter, the stock turned volatile and swung

violently from RM10.70 to RM11.80 from Jan to Jun
2010.

♦ Only after the 10-day SMA regained its dominance

to above the 40-day SMA near RM11.50 in mid-Jun,
the uptrend on the stock resumed.

♦ The stock reached the RM12.00 significant

resistance level in Jul, but staged a powerful rally
at above the RM12.00 level on last Friday.

♦ As it closed the day with a huge bullish candle, plus

a sudden uptick on the momentum indicators, we
are of the view that the stock is ready to stage a
further run-up in the immediate term.

♦ Should it sustain at above the RM12.00 support

level, it will head higher into the uncharted territory
and chalk new high in the sessions ahead.

♦ This bullish outlook will only be voided if it loses

RM12.00 and the 40-day SMA near 11.91, and the
key support level at RM11.50 unexpectedly.

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank
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differ or be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not
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persons may from time to time have an interest in the securities mentioned by this report.

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The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the KLCI benchmark by greater than five percentage points over the next 6-12 months.

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Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or
more over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take
on higher risks.

Market Perform = The stock return is expected to be in line with the KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

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