BIMB Holdings; Hold; RM4.12
Fair Value: RM4.30 (Prev RM3.90); BIMB MK
Buys 49% of Bank Islam

Buys remaining stake in Bank Islam from Dubai Financial Group (30.5%) and LTH (18.5%) for RM2.8bn; funded by Rights/Sukuk (51%/49%). Post acquisition, BIMB’s earnings will double; BVPS and EPS dilutive given the enlarged share base but ROE accretive. Tighter measures on consumer loans could cap growth; cut FY13-15 loan growth target. Maintain HOLD; TP raised to RM4.30TP to account for the acquisition and rights impact.

Source: HwangDBS Research - 2 Aug 2013