Stock Name: PBBANK
Company Name: PUBLIC BANK BHD
Research House: OSK

KUALA LUMPUR: OSK Research is maintaining its TP of RM14.20 for Public Bank, which implies an ROE of 26% and FY11 price-to-book value multiplier of 3.80 times.

It said on Tuesday, Nov 9 the immediate term catalysts for the stock, which has lagged the market, are its lower provisions and upside surprise to loans growth.

OSK Research said in its recent meeting with management, the discussion largely centered on:

1) the sustainability of its current dividend payout,

2) the potential of maintaining a risk weighted annual asset growth of 15% p.a without raising additional capital, and

3) impact of the recent move to impose a 70% loan to value (LTV) cap on third property financing on the group's mortgage growth.

OSK Research said Public Bank's management said it was able to appease investors concerns on all three fronts.