(PBK MK/BUY/RM20.48/Target: RM22.50)

Public Bank’s 3Q17 earnings were in line with expectations. Earnings and PPOP growth were solid at 13.5% yoy and 13.7% yoy respectively. NIM expansion, strong fee income growth and more disciplined cost control were key earnings drivers. Asset quality remained stable while provisions declined yoy. Maintain BUY and raise our target price to RM22.50 (2.3x P/B, 14.2% ROE) as we roll forward our Gordon Growth valuation to 2018.

Source: UOB Kay Hian Research - 27 Oct 2017