PBBANK – Fundamental Analysis (23 Oct 2015)

Fundamental Analysis as of FY14 – http://www.slideshare.net/lcchong76/pbbank-fundamental-analysis-fy14

Peer Comparison in Bank Industry (KLSE) – http://www.slideshare.net/lcchong76/bank-industry-klse-peer-comparison

Excel – http://1drv.ms/1PF9lZA

Latest Financial – Q3 2015 Financial Report (22 Oct 2015)http://www.bursamalaysia.com/market/listed-companies/company-announcements/4899209

FY15 Q3 Results Highlight:

  • PBBANK reported a 3QFY15 net profit of RM1.2b which grew modestly by +0.4%qoq and +0.8%yoy. This led to a net profit of RM3.57b (+9.3%yoy) for 9MFY15.
  • Provisions for loan impairment rose by +27.7%yoy for 9MFY15. This was contributed by a rise in provisions in 3QFY15.
  • 9MFY15 PPOP grew +10.0%yoy. This was supported by an improved NOII of +20.7%yoy with higher FX gains of +69.4%yoy due to favourable FX movements.
  • NIM improved 5bp sequentially to 2.16% in 3QFY15. The NIM improvement was contributed by stronger expansion in loans which pushed its LD ratio higher. Loan growth picked up pace to a higher annualised rate of 12.5% as compared to 11.2% annualised for 6MFY15.
  • The Group’s net LD ratio rose to 89.8%, up from 87.0% in the preceding quarter.
  • Faster pace in loans growth with domestic loans continuing to grow at a rate which outpaced the industry. The Group’s gross loans accelerated to an annualised rate of 12.5%. This was contributed by faster pace of international loans which gained momentum to a higher annualised growth of 40.3% contributed mainly by Hong Kong (37.3% annualised) and Cambodia operations (48.1% annualised). Meanwhile, domestic loan growth remained stable with an annualised growth of 10.5%. Market share for domestic loans remained steady at 17.4%.
  • On track to achieve all FY15 KPI targets. The Group remains on track to achieve its FY15 KPI targets of:
    • Loan growth of 9-10%
    • Deposit growth of 9-10%
    • Net ROE of > 16%
    • RWCR of > 13.0%
    • GIL ratio of < 1%
    • CI ratio of < 32%

Valuation:

  • Historical P/B
    • Trailing:
      • FY14 (BPS: 7.674) – 19.51 (Uncertainty Risk: HIGH)
      • Current (BPS: 7.676) – 19.51 (Uncertainty Risk: HIGH)
    • Forward:
      • FY15 (BPS: 7.66 ± 5%) – From 18.50 to 20.44 (Uncertainty Risk: HIGH)
      • FY16 (BPS: 8.372 ± 5%) – From 20.22 to 22.35 (Uncertainty Risk: MEDIUM to HIGH)
    • BPS applied to reach the current stock price (18.6): 7.317
  • In my opinion, fair value of PBBANK range from 20 to 20.80.

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Going Forward:

Despite unexpected good results of PBBANK in Q2FY15, moving forward, I believe that PBBANK result will be stable or a bit slow down. This is because loan applications will continue to be slow marginally and NIM compression will be higher in the future.

I will continue to hold this share, and accumulate it when there is a dip in the price.

At the time of writing, I owned shares of PBBANK.

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4 thoughts on “PBBANK – Fundamental Analysis (23 Oct 2015)

  1. Hi Mr Chong.
    I would like to understand more about dividend.
    If I have a lot of pbb share, dividend is 24% on Aug2015.

    How much I got as dividend stated in 24%

    Please advise.. thanks.

    Like

  2. Hello Sir…What do you think about this budget sir…i really like your value investing cause im trader..not really know about fundamental..i know this budget not very fascinating haha..Thanks for your study before this…

    Like

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