AmResearch is maintaining Public Bank Bhd as its preferred pick for exposure to Malaysia’s banking industry.
The recent selldown on concerns about its capital adequacy being weak has been misplaced, said the research house after a recent company visit.
“At fair value of RM10.00 to the share, stock would be valued at 3.3 times its book value (BV) and offers upside of 26%,” it said in a research note on April 7.
“Operations-wise, Public Bank was on course to report 3%-4% quarter-on-quarter loans growth for 1Q ended March 31, 2009. This worked out to an annualised increase of about 16%,” it said.
AmResearch said, nevertheless, growth for full year would be moderated by softening demand for credit. It also said there was no change in Public Bank’s strategy to grow market share via above average loans growth.
“We believe Public Bank would register loans growth of 6% in FY09F and 8% in FY10F,” it said.
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