Equity Research
PP11072/03/2010 (023549)



Sector Update                                                                 ...
Banking


                                                       Other indicators

                                       ...
Banking


   Banking System Loans                                                                                         ...
Banking



   Banking System Risk Weighted Capital Ratio                                                                  ...
Banking

 Commercial Banks’ Absolute Gross NPL
  (RM m)                                 Dec.       Mar.       Jun.       S...
Banking

  Definition of Ratings
  Maybank Investment Bank Research uses the following rating system:
   STRONG BUY Total ...
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BANKING Mar 09 Statistics Some Resilience

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Positive signs. Loan disbursements, repayments, applications and
approvals rebounded with strong double-digit MoM growth, flattish-tolow-
teens YoY growth, and in absolute term, were back to pre-Aug/Sep
’08 levels. Absolute NPLs continued to inch lower, mainly from the
working capital segment. Nonetheless, it is early to tell whether these
are sustainable as global fundamentals remain weak.
Strong loan disbursements and repayments. Banking loans (net of
repayments) grew to RM733.9m in Mar ’09 (+0.6% MoM, +10.9% YoY)
on expansion in both household (+0.4% MoM, +8.8% YoY) and
business loans (+0.9% MoM, +9.5% YoY). The pace of disbursements
and repayments was strong (disbursements: +27.4% MoM, +9% YoY;
repayments: +15.7% MoM, +4.8% YoY), mainly for working capital.
YTD loans growth was +1% (household: +1.5%, business: +0.5%).
Forward indicators bounced MoM but still flattish YoY. Loan
applications and approvals also rebounded strongly: +24.3% MoM and
+35.3% MoM respectively. On a YoY comparison, loan applications
were up 4.7%, driven by household loan applications (+21.5%), mainly
for home purchases, which off-set lower applications from businesses
(-11%). Overall loan approvals were rather flattish YoY, with approvals
up for household loans (+12.6%) but down for business loans (-13%).
Absolute NPLs contracted further. Absolute gross NPLs continued
to inch lower, at a slightly higher pace of -3.7% MoM to RM33.6b (Feb
‘09: -0.04% MoM). On a 3-month comparison (see table in page 4),
the lower NPLs came mainly from the working capital segment,
reflecting perhaps resilient business strength. Meanwhile, net NPL ratio
was little changed at 2.24% (Feb ‘09: 2.23%).
Remain Underweight. YTD loans growth, if sustained, should lead to
the upper end of our 2-3% loans growth forecast for 2009. Our other
assumption is for absolute NPLs to expand by 50% YoY by end-2009,
leading to a projected 10% decline in combined net profit for 2009.
While loans quality was resilient in Mar ’09, we remain concerned over
rising NPLs – our analysis shows a 3-6 months interval from GDP
trough to NPL peak. The other main risk is a protracted economic
slowdown leading to rising unemployment and asset deflation.

Published in: Economy & Finance, Business
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Transcript of "BANKING Mar 09 Statistics Some Resilience"

  1. 1. Equity Research PP11072/03/2010 (023549) Sector Update 30 April 2009 Banking Mar ’09 statistics: Some resilience Underweight (unchanged) Positive signs. Loan disbursements, repayments, applications and approvals rebounded with strong double-digit MoM growth, flattish-to- low-teens YoY growth, and in absolute term, were back to pre-Aug/Sep ’08 levels. Absolute NPLs continued to inch lower, mainly from the working capital segment. Nonetheless, it is early to tell whether these are sustainable as global fundamentals remain weak. Wong Chew Hann, CA wchewh@maybank-ib.com Strong loan disbursements and repayments. Banking loans (net of (603) 2297 8686 repayments) grew to RM733.9m in Mar ’09 (+0.6% MoM, +10.9% YoY) on expansion in both household (+0.4% MoM, +8.8% YoY) and business loans (+0.9% MoM, +9.5% YoY). The pace of disbursements and repayments was strong (disbursements: +27.4% MoM, +9% YoY; repayments: +15.7% MoM, +4.8% YoY), mainly for working capital. YTD loans growth was +1% (household: +1.5%, business: +0.5%). Forward indicators bounced MoM but still flattish YoY. Loan applications and approvals also rebounded strongly: +24.3% MoM and +35.3% MoM respectively. On a YoY comparison, loan applications were up 4.7%, driven by household loan applications (+21.5%), mainly for home purchases, which off-set lower applications from businesses (-11%). Overall loan approvals were rather flattish YoY, with approvals up for household loans (+12.6%) but down for business loans (-13%). Absolute NPLs contracted further. Absolute gross NPLs continued to inch lower, at a slightly higher pace of -3.7% MoM to RM33.6b (Feb ‘09: -0.04% MoM). On a 3-month comparison (see table in page 4), the lower NPLs came mainly from the working capital segment, reflecting perhaps resilient business strength. Meanwhile, net NPL ratio was little changed at 2.24% (Feb ‘09: 2.23%). Remain Underweight. YTD loans growth, if sustained, should lead to the upper end of our 2-3% loans growth forecast for 2009. Our other assumption is for absolute NPLs to expand by 50% YoY by end-2009, leading to a projected 10% decline in combined net profit for 2009. While loans quality was resilient in Mar ’09, we remain concerned over rising NPLs – our analysis shows a 3-6 months interval from GDP trough to NPL peak. The other main risk is a protracted economic slowdown leading to rising unemployment and asset deflation. Banking Sector – Peer Valuation Summary Stock Rec Shr px Mkt cap TP PER (x) PER (x) P/B (x) P/B (x) ROAE ROAE Gross Gross (%) (%) yld yld (RM) (RMm) (RM) CY09E CY10E FY09E FY10E CY09E CY10E FY09E FY10E Maybank * NR 4.28 30,292 NR 11.7 12.4 1.1 1.1 8.8 8.5 5.8 5.8 BCHB Sell 7.90 28,267 5.40 14.9 14.1 1.5 1.4 10.6 10.4 2.3 2.3 Public Bank Sell 8.50 30,021 7.60 12.7 12.3 2.7 2.4 22.3 20.7 5.9 6.5 RHB Cap Hold # 4.04 8,700 3.60 10.2 9.5 1.0 1.0 10.6 10.5 3.7 3.7 AMMB Hold # 2.97 8,087 2.50 11.5 11.2 1.0 1.0 9.0 8.6 2.4 2.0 EON Cap FV 3.50 2,426 3.00 11.8 11.0 0.7 0.7 6.3 6.4 2.9 2.9 HL Bank * NR 5.60 8,849 NA 10.7 10.3 1.5 1.4 15.1 13.9 3.9 4.0 AFG * NR 1.99 3,081 NA 9.2 8.2 1.1 1.0 12.3 10.9 3.4 3.8 Affin Hldgs * NR 1.70 2,540 NA 11.3 9.8 0.5 0.5 5.4 5.6 2.9 2.8 Sector (weighted) 122,264 12.2 11.9 1.3 1.2 * Consensus; # Under Review; Source: Maybank-IB
  2. 2. Banking Other indicators Deposits and LDR little changed. System deposits rose slightly by 1% MoM (+8% YoY) to RM985.8b driven by higher deposits placed by financial institutions, businesses, and to a lesser extent, individuals. System loan-to-deposit ratio (LDR) was little changed at 73.7% as at end-Mar ’09 (Feb ’09: 73.6%). Lending rates at historic low. There was no further OPR reduction at yesterday’s Monetary Policy Committee meeting after three cuts since Nov ’08 totalling 150bps (see table below). Commercial banks’ average base lending rate (BLR) reached a historic low of 5.53% as at 15 Apr ’09 with a total 119bps reduction since Nov ‘08. Average lending rate (ALR) also touched a historic low of 5.16% as at end-Mar ’09. Impact of OPR cuts on BLR and FD Rate st nd rd 1 OPR cut 2 OPR cut 3 OPR cut (24 Nov ’08) (21 Jan ’09) (24 Feb ’09) OPR 3.25% (-25bps) 2.50% (-75bps) 2.00% (-50bps) SRR 3.50% (-50bps) 2.00% (-150bps) 1.00% (-100bps) BLR (average) 6.48% @ end-Dec 5.89% @ end-Feb 5.53% @ 15 Apr ’09 ‘08 (-24bps) ’09 (-59bps) (-36bps) FD rate: 1-month 3.00% (-10bps) 2.50% (-50bps) 2.00% (-50bps) 3-month 3.50% (-20bps) 3.00% (-50bps) 2.50% (-50bps) Source: Maybank-IB Capitalisation remained strong. System loan loss coverage stayed strong at an estimated 88.3% (Feb ’09: 89.2%). System capitalisation improved with a core ratio of 11.5% (Feb ‘09: 11.1%) and RWCR of 13.4% (Feb ‘09: 13.1%). Loans Momentum (% YoY) Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Gross loans +10.1 +11.0 +11.7 +9.9 +11.0 +10.6 +10.3 +10.7 +12.8 +11.7 +10.9 +10.9 - Businesses +11.5 +12.6 +14.4 +9.4 +11.4 +9.5 +8.8 +7.8 +13.2 +11.8 +10.0 +9.5 - Households +8.2 +8.7 +8.9 +8.8 +8.7 +9.1 +8.9 +9.0 +9.1 +9.1 +8.9 +8.8 Applications +52.4 -9.7 -5.2 +11.9 +25.5 -5.8 -7.9 -32.6 -18.8 -21.0 +8.1 +4.7 Approvals +57.4 -19.0% -23.4 +2.3 +15.8 -2.9 -14.4 -44.0 -23.7 -35.5 -15.9 -0.7 Source: Bank Negara Interest Rates (%) Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 BLR 6.72 6.72 6.72 6.72 6.72 6.72 6.72 6.66 6.48 6.38 5.89 5.53 ALR 6.19 6.13 6.08 6.02 5.98 5.96 6.01 5.98 5.86 5.77 5.49 5.16 ADR 3.31 3.31 3.31 3.31 3.31 3.31 3.31 3.21 3.16 2.63 2.16 2.14 ALR-ADR 2.88 2.82 2.77 2.71 2.67 2.65 2.70 2.77 2.70 3.14 3.33 3.02 ALR-BLR -0.53 -0.59 -0.64 -0.70 -0.74 -0.76 -0.71 -0.68 -0.62 -0.62 -0.40 -0.37 ADR-CPI 0.27 -0.49 -4.38 -5.20 -5.19 -4.90 -4.32 -2.50 -1.24 -1.27 -1.54 -1.38 Note: ADR refers to the average of fixed deposit rates; Source: Bank Negara Asset Quality & Capitalisation Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Gross NPL 39.5 37.8 36.9 36.7 36.8 36.1 36.3 35.9 35.1 34.9 34.9 33.6 (3-mth) (RMb) Net NPL (%) 2.87 2.81 2.66 2.53 2.50 2.40 2.43 2.38 2.25 2.21 2.23 2.24 Loan loss cov 81.0 80.9 82.4 84.5 85.1 86.9 86.7 86.8 89.1 89.6 89.2 88.3 (%) Tier 1 cap (%) 10.1 9.9 10.8 10.9 10.8 10.6 10.4 10.4 10.5 11.0 11.1 11.5 RWCR (%) 13.1 13.0 13.6 13.6 13.4 13.1 12.7 12.5 12.6 12.9 13.1 13.4 Source: Bank Negara 30 April 2009 Page 2 of 6
  3. 3. Banking Banking System Loans Banking System Loans Growth RMm Mar 09: Total Loans RM734b YoY Mar 09: Overall Loans Growth (+10.9% YoY, +0.6% MoM) (Households 54.3%, Businesses 45.7%) 40% 800,000 30% 600,000 20% 400,000 10% 200,000 0% 0 Dec-97 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 -10% -20% Total Loans Consumer Loans Business Loans Business Loans Household Loans Source: Bank Negara Source: Bank Negara Banking System Loans Approval (Total) Banking System Loans Approved (Segmental) RMm Mar 09: Loans Approved Mar 09: Loans Approved RM24.3b (-0.7% YoY, +35.3% RMm 7,000 MoM) 40,000 6,000 5,000 30,000 4,000 3,000 20,000 2,000 1,000 10,000 0 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 0 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Residential property Passenger cars Construction Source: Bank Negara Source: Bank Negara Banking System Loans Disbursed Banking System Loans Repaid Mar 09: Loans Disbursed RM55.5b (+9% YoY, +27.4% MoM) Mar 09: Loans Repaid RM48.4b (+4.8% YoY, +15.7% MoM) RMm RMm 60,000 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 0 0 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Source: Bank Negara Source: Bank Negara Banking System Loans-to-Deposit Banking System NPL and Loss Loss Coverage Mar 09: Loans-to-Deposits 73.7% Mar 09: Net NPL 2.24%, LLC 88.3% 100% 20% 100% 80% 15% 90% 60% 10% 80% 40% 5% 20% 70% 0% 0% 60% Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Loan Loss Coverage (LHS) Net NPL (RHS) Source: Bank Negara Source: Bank Negara 30 April 2009 Page 3 of 6
  4. 4. Banking Banking System Risk Weighted Capital Ratio Banking System Tier 1 Capital Ratio (%) Mar 09: RWCR 13.4% (%) Mar 09: Core Capital Ratio 11.5% 15 12 14 11 13 10 12 9 11 8 10 7 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Source: Bank Negara Source: Bank Negara Banking System Average Lending and Deposit Rates Interest Spread (ALR - ADR) (%) Mar 09: ALR 5.16%, 3MFD 2.04% (%) Mar 09: Interest Spread 3.02% 15 6 5 12 4 9 3 6 2 3 1 0 0 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 3-month FD Rate Average Lending Rate Source: Bank Negara Source: Bank Negara Real Fixed Deposit Rate (FD Rate - Inflation) Base Lending Rate vs. Overnight Policy Rate (%) Mar 09: BLR 5.53%, OPR 2% (%) Mar 09: Real Deposit Rate -1.38% 8 4 3 7 2 6 1 5 0 4 -1 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 3 -2 2 -3 1 -4 -5 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Oct-08 Apr-09 Apr-08 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 -6 Source: Bank Negara Source: Bank Negara 30 April 2009 Page 4 of 6
  5. 5. Banking Commercial Banks’ Absolute Gross NPL (RM m) Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 1,672.9 1,588.7 1,414.7 1,276.2 1,040.1 969.1 787.4 751.2 710.4 499.3 Purchase of securities 3,969.4 3,732.8 3,151.3 2,873.0 2,531.0 2,425.7 2,131.1 1,954.5 2,029.7 2,050.2 Purchase of transport vehicle 14,051.4 14,232.8 13,734.4 13,177.5 12,163.5 11,736.6 10,837.9 10,491.9 10,731.6 10,878.3 Purchase of residential property 314.8 308.6 290.2 280.1 235.2 217.9 184.5 172.8 168.6 160.2 <= 25k 1,627.2 1,680.9 1,602.1 1,485.7 1,358.3 1,301.9 1,120.4 1,078.7 1,107.1 1,101.1 >25k to 60k 2,853.4 2,862.0 2,772.0 2,585.0 2,411.6 2,325.4 2,135.7 2,064.0 2,113.8 2,119.0 >60k to 100k 2,967.3 2,997.4 2,953.7 2,829.4 2,662.8 2,587.1 2,401.8 2,323.6 2,366.8 2,383.5 >100k to 150k 3,551.5 3,574.1 3,538.7 3,444.2 3,154.1 3,049.3 2,825.4 2,702.0 2,722.4 2,752.1 >150k to 250k 2,737.1 2,809.9 2,577.6 2,553.2 2,341.4 2,254.9 2,170.0 2,150.7 2,253.0 2,362.4 >250k 4,287.7 4,192.8 3,948.1 3,879.1 3,568.8 3,178.5 2,990.4 2,847.9 2,686.5 2,431.2 Purchase of non-residential property 710.4 693.7 608.6 584.2 569.6 507.5 479.0 479.2 480.1 483.8 Industrial building and factories 863.4 845.1 826.8 780.1 725.0 648.6 651.5 590.2 489.7 422.3 Land 717.5 688.3 669.5 670.1 601.0 507.0 451.7 435.4 440.7 318.0 Commercial complexes 1,243.8 1,219.8 1,160.0 1,180.3 1,129.4 1,123.6 1,030.3 984.0 945.9 909.1 Shophouse 752.7 746.0 683.3 664.4 543.8 391.8 377.9 359.0 330.1 297.9 Others 289.1 273.3 317.4 270.4 235.4 197.1 234.5 237.0 233.8 257.8 Purchase of fixed assets other than land and building 1,772.5 1,940.0 1,838.0 1,720.7 1,684.7 1,800.5 1,574.4 1,582.0 1,585.4 1,523.0 Personal uses 740.5 766.9 761.4 586.0 559.9 566.2 537.4 515.0 590.4 629.6 Credit cards 20.5 17.9 17.0 16.0 13.7 15.2 9.7 10.1 10.9 10.9 Purchase of consumer durable goods 3,104.1 2,967.3 2,330.9 2,253.9 2,089.8 2,033.6 1,971.6 1,870.5 1,676.3 1,611.0 Construction 14,741.4 14,564.1 14,491.6 14,379.8 13,983.9 13,814.3 13,423.6 13,474.5 12,418.6 11,616.1 Working capital 3,892.6 3,788.1 3,254.3 2,986.2 2,661.6 2,508.8 1,629.6 1,392.4 1,399.3 1,283.4 Other purpose Total non-performing loans 48,542.1 48,064.7 45,258.9 43,418.8 40,532.4 39,245.6 36,127.7 35,126.9 34,073.0 32,790.9 Commercial Banks’ Gross NPL Ratio Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 9.0% 8.3% 6.7% 3.3% 4.3% 3.7% 2.8% 2.5% 2.3% 1.7% Purchase of securities 3.9% 3.6% 3.0% 2.7% 2.4% 2.2% 1.9% 1.7% 1.8% 1.8% Purchase of transport vehicle 8.7% 8.7% 8.2% 7.7% 7.0% 6.6% 6.0% 5.6% 5.6% 5.6% Purchase of residential property 17.2% 15.9% 14.1% 14.2% 13.6% <= 25k 24.5% 24.7% 19.4% 19.1% 16.8% 12.1% 10.6% 10.3% 10.7% 10.6% >25k to 60k 14.1% 14.7% 14.2% 13.3% 12.6% 10.6% 9.8% 9.5% 9.7% 9.9% >60k to 100k 12.4% 12.6% 12.2% 11.5% 10.9% 9.2% 8.6% 8.2% 8.3% 8.2% >100k to 150k 10.7% 10.8% 10.6% 10.1% 9.5% 6.5% 5.9% 5.6% 5.5% 5.6% >150k to 250k 7.5% 7.4% 7.7% 7.4% 6.7% 3.4% 3.0% 2.8% 2.8% 2.8% >250k 5.4% 5.3% 4.5% 4.2% 3.7% 9.4% 8.9% 8.0% 7.4% 6.5% 5.5% 5.0% 4.5% 4.0% 3.6% Purchase of non-residential property 6.3% 5.7% 5.4% 5.1% 5.0% Industrial building and factories 11.0% 10.3% 8.7% 7.9% 7.3% 6.1% 5.6% 4.6% 3.7% 3.1% Land 10.9% 10.4% 9.8% 8.7% 7.3% 7.6% 6.4% 5.9% 5.7% 4.1% Commercial complexes 13.9% 12.5% 11.7% 10.8% 9.6% 4.4% 3.9% 3.6% 3.3% 3.1% Shophouse 5.8% 5.6% 5.1% 4.9% 4.6% 6.3% 5.7% 5.3% 4.6% 4.2% Others 16.1% 15.1% 12.6% 11.8% 9.2% 65.4% 57.5% 65.7% 52.3% 41.4% 33.1% 33.3% 30.0% 28.3% 30.6% Purchase of fixed assets other than land and building 7.7% 8.1% 7.4% 6.6% 6.3% 6.5% 5.5% 5.3% 5.1% 4.7% Personal uses 3.7% 3.8% 3.6% 2.7% 2.5% 2.5% 2.3% 2.2% 2.4% 2.6% Credit cards 10.2% 8.6% 7.6% 6.7% 8.0% 9.2% 6.4% 6.9% 6.4% 7.0% Purchase of consumer durable goods 19.4% 18.6% 15.9% 15.5% 14.4% 13.4% 12.4% 11.5% 10.1% 9.2% Construction 8.8% 8.5% 8.2% 8.1% 7.7% 7.3% 6.7% 6.4% 6.0% 5.7% Working capital 15.0% 16.3% 14.2% 12.7% 11.2% 11.1% 6.9% 5.9% 4.7% 3.9% Other purpose Total non-performing loans 8.3% 8.1% 7.5% 6.8% 6.4% 6.0% 5.3% 5.0% 4.7% 4.5% Source: Bank Negara, Tabulated by Maybank-IB 30 April 2009 Page 5 of 6
  6. 6. Banking Definition of Ratings Maybank Investment Bank Research uses the following rating system: STRONG BUY Total return is expected to exceed 20% in the next 12 months; high conviction call BUY Total return is expected to be above 10% in the next 12 months HOLD Total return is expected to be between above 0% to 10% in the next 12 months FULLY VALUED Total return is expected to be between -10% and 0% in the next 12 months SELL Total return is expected to be below -10% in the next 12 months TRADING BUY Total return is expected to be between 10-20% in the next 6 months arising from positive newsflow e.g. mergers and acquisition, corporate restructuring, and potential of obtaining new projects. However, the upside may or may not be sustainable Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax Disclaimer This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Bhd and consequently no representation is made as to the accuracy or completeness of this report by Maybank Investment Bank Bhd and it should not be relied upon as such. Accordingly, no liability can be accepted for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Maybank Investment Bank Bhd, its affiliates and related companies and their officers, directors, associates, connected parties and/or employees may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward- looking statements. Maybank Investment Bank Bhd expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. This report is prepared for the use of Maybank Investment Bank Bhd's clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of Maybank Investment Bank Bhd and Maybank Investment Bank Bhd accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Published / Printed by Maybank Investment Bank Berhad (15938-H) (Formerly known as Aseambankers Malaysia Berhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur Tel: (603) 2059 1888; Fax: (603) 2078 4194 Stockbroking Business: Level 8, MaybanLife Tower, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur Tel: (603) 2297 8888; Fax: (603) 2282 5136 http://www.maybank-ib.com 30 April 2009 Page 6 of 6

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