Maybank was granted a banking operating licence by the Central Bank of  Vietnam,  among  the  nine  foreign  banking  licenses  that  were awarded  on  1  October  2014.  The  licences  will  enable  the  bank  to participate in previously restricted services in Myanmar, such as credit extension to foreign companies and domestic banks. (Source: Bursa Announcement, Media)

Comments:  We  are  excited  about  Maybank's  prospects  in  Myanmar given  the  untapped  potential  for  banking/project-funding  in  the Myanmar as well as the opportunity for Maybank to further deepen its business relationship with the local banks. Maybank has been playing a  pivotal  role  in  technical-sharing  and  capability-building  with  the Myanmar  banks  and  had  financed  key  infrastructure  projects  in  the country.

The impact on Maybank's FY15-16E earnings may not be significant in our view, as the operating licence only allows a single branch and does not  permit  expansion  into  retail  banking,  at  least  for  the  initial  years. We reiterate our BUY rating on Maybank, Price Target RM12.00 based on  a  FY15  2.0x  P/BV  target,  with  20%  upside  potential  plus  a  5.5% dividend yield

Source: Affin Hwang Capital Research - 2 Oct 2014

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