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雷达卡
14% earnings pullback for 1Q09. 1Q09 was not a good quarter for Malaysian
banks. Their combined net profit fell 14.2% yoy to RM2.49bn, dampened by (1) a
49.1% yoy jump in loan loss provisioning (LLP), (2) a 7.1% slide in non-interest
income, and (3) a 16.7% rise in overheads. These factors overwhelmed the
positive impact of an 11% increase in net interest income.
• Broadly in line. Although annualised sector net profit was 9.6% higher than our
forecast, we deem the results to be broadly in line as we envisage weaker
earnings ahead, especially for RHB Capital, EON Capital and Affin due to an
expected rise in credit costs. Two banks – Maybank and Hong Leong Bank –
outdid our expectations and only Alliance missed our forecast.
• Earnings reversal in 2009. We are projecting 4.2% earnings slippage for the
banks in our universe in 2009 arising from (1) a 60% jump in LLP in tandem with
higher NPLs, (2) flattish or even lower net interest income due to margin
squeeze and sluggish loan growth, and (3) a high cost-to-income ratio of about
47%.
• Loan growth to lose traction. Though slower than Dec 08’s 12.8% yoy growth,
the industry’s annual loan growth remained brisk at 10.9% yoy in Mar 09, fuelled
by a spike in corporate loans and loans to the government and non-banking
financial institutions. Considering the weak economic situation, we expect a
downshift in loan growth to 2-3% in 2009 due to the weakening momentum for
both SME and consumer loans.
• Upward reversal in NPL ratio. The industry’s 3-month net NPL ratio remained
stable at 2.2% from Dec 08 to Mar 09. However, this is not reflective of the trend
for all the banks as four out of the nine local banks saw an increase in their net
NPL ratios in 1Q09. For 2009, we are projecting a 2.4% pt increase in the
industry’s gross NPL ratio to 7%.
• Maintain NEUTRAL. For now, we are maintaining our NEUTRAL stance on
Malaysian banks in view of a further slowdown in loan growth and the likely
upturn in NPLs. However, due to the improvement in their risk management and
loan recovery systems, we believe most banks can ride out the economic
downturn while a few banks will benefit from the recovery of capital markets. In
the longer term, most banks will reap the benefits from their ongoing
transformation programmes and regional expansion. Our top pick remains Public
Bank.
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