(PBK MK/BUY/RM19.92/Target: RM22.00)

Public Bank’s 1Q17 earnings were in line with expectations, supported by a solid NIM and benign provisions. Asset quality remained robust while overall domestic loan growth continued to trump industry’s growth. Having the highest loan loss reserves buffer inclusive of regulatory reserves (249%) is a major positive as the implementation of MFRS9 draws closer where higher structural provisions are required. Maintain BUY. Target price: RM22.00, or 2.4x 2017F P/B

Source: UOB Kay Hian Research - 21 Apr 2017