KUALA LUMPUR (Oct 21): CIMB Investment Bank Bhd has maintained its "hold" rating on Public Bank Bhd at RM19.80 with a higher target price (TP) of RM19.50 (from RM19.05) in view of its rich valuation; however, dividend discount model based TP is raised to RM19.50 due to rollover to end-2017. In a note today, CIMB analyst Winson Ng said Public Bank's net profit rose at a slower pace of 3.1% year-on-year (y-o-y) in 3QFY16 compared to 5% y-o-y in 2QFY16. "3QFY16 net profit growth was mainly dragged down by a 13.2% y-o-y drop in non-interest income, resulting from 70–72% y-o-y plunge in investment income and foreign exchange gains," he said. Ng said that in line with the industry trend, Public Bank's loan growth eased from 9.5% y-o-y in June to 7.5% y-o-y in September. He said that for the nine months ended Sept 30, 2016 (9MFY16), Public Bank's net profit was largely in line with expectations, accounting for 73% of full-year forecast and 75% of Bloomberg consensus.

Source: The Edge Markets October 21, 2016 03:11 UTC