Highlights

Malayan Banking Berhad - Strong Earnings Growth in Indonesia

Date: 19/02/2019

Source  :  MIDF
Stock  :  MAYBANK       Price Target  :  11.40      |      Price Call  :  BUY
        Last Price  :  8.92      |      Upside/Downside  :  +2.48 (27.80%)
 


INVESTMENT HIGHLIGHTS

  • Strong earnings in FY19 for Maybank Indonesia
  • NII moderated income decline
  • Asset quality stable
  • Loans book expanded but deposits declined
  • No change to our forecast for Maybank Group
  • Maintain BUY with unchanged TP to RM11.40 based on PB multiple of 1.6x

Key takeaway. We participated in a briefing by the management of Maybank Indonesia yesterday. Below are the key takeaway:

  • FY18 saw strong earnings growth and highest PATAMI in its history.
  • Loans growth and asset quality improvement led to the good performance.
  • Sufficient funding and liquidity.

Strong earnings in FY18. Maybank Indonesia posted an earnings growth of +21.6%yoy to IDR2.26t, mainly supported by lower provisions. Provisions fell by -38.6%yoy as asset quality improved with gross NPL ratio declining -0.22ppt(yoy) to 2.59%.

NII moderated income decline. Total income in FY18 came in flattish at -0.7%yoy for Maybank Indonesia. This was due to the - 17.3%yoy decline in NOII. However, NII had moderated this impact as it grew +5.2%yoy despite operating in a policy rate hike environment. Note, in Indonesia, deposit rate are repriced faster than interest rate after a policy rate hike. Interest expense fell -5.8%yoy to IDR6.69t while interest income fell only by -0.1%yoy to IDR14.79t in FY18.

Loans book expanded but deposits declined. As at end 4QFY18, Maybank Indonesia’s loans book expanded +6.3%yoy to IDR133.3t. The growth was driven by non-retail segment where it grew +10.9%yoy to IDR58.3t. Of this, business banking and SME loans grew +9.8%yoy and +12.4%yoy to IDR34.0t and IDR24.3t respectively. Meanwhile, deposits from customers contracted -3.7%yoy to IDR116.8t as CASA fell -8.3%yoy to IDR44.5t. Despite liquidity remained tight, its LCR and NSFR (both bank only) stood at above regulatory requirement of 100% at 116.6% and 107.2% respectively. The management indicated that measures already in place to manage liquidity in addition to selective loans growth.

Source: MIDF Research - 19 Feb 2019

Share this
Labels: MAYBANK

Related Stocks

Chart Stock Name Last Change Volume 
MAYBANK 8.92 0.00 (0.00%)

  Be the first to like this.
 


 

1893 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 SCOMNET 0.850.00 
 KOTRA 1.760.00 
 UCREST 0.210.00 
 PINEAPP 0.2750.00 
 PUC 0.0750.00 
 WILLOW 0.440.00 
 IRIS 0.1550.00 
 BTECH 0.230.00 
 3A 0.810.00 
 TENAGA-C57 0.1450.00 

TOP ARTICLES

1. WILL THIS STOCK GET LIMIT UP? Invest Smart Way
2. THIS STOCK IS TOO CHEAP TO IGNORE Invest Smart Way
3. AirAsia opens RedBeat digital arm to investors ahead of possible IPO Good Articles to Share
4. AirAsia Group - AAG to Thrive HLBank Research Highlights
5. Mplus Market Pulse - 26 Jun 2019 M+ Online Research Articles
6. E.A. Technique (M) Berhad - Too Cheap To Ignore PublicInvest Research
7. This One Habit Will Make You Poor Forever Good Articles to Share
8. VS Industry Berhad - As Expected PublicInvest Research
Partners & Brokers