Share Price: RM5.65 | Target Price: RM5.70 | Rating: Neutral
Strong earnings growth on a QoQ basis to be driven by robust loans growth and lower operating expense although possibly offset by slight pressure on NIM and a lower CASA ratio. Capital reallocation of capital to grow its Business Banking (BB) and Retail SME (RSME) segments, which provides higher ROA of 1.57% and 3.2% respectively, in line with the bank’s target to grow its ROA to 1.1% by FY29 (9MFY25: 1.01%). Management has indicated that there are no plans for special dividends, bonus issue or corporate actions to conserve capital in order to maintain its credit rating. Public Investment Bank expects dividend payout in FY25 to be higher (FY24: 40%) and is retaining its Neutral call with Target Price of RM5.70. It opines that AMBANK share price is trading at a premium at 0.9x P/BV, above +2SD of its average 5-year P/BV.
AMBANK 27/3/25 Research Update
Research House: Public Investment Bank (PIB)
Analyst: Wong Ling Ling
FY2025 Forecast: Net Profit: RM1,939m | EPS: RM0.585 | DPS: RM0.293