KUALA LUMPUR (Oct 24): Public Bank Bhd's shares gained 0.11% to RM18.64 on the back of favourable results achieved in 3QFY14.
The counter touched a high of RM18.80 in morning trades, before easing off to RM18.64 as at 11:24am for a 2 sen gain.
However, MIDF Research is maintaining its “neutral” call on Public Bank with a lower target price of RM19.50 from RM19.60 previously, pegging the stock to a 2.5 times FY15 price-to-book ratio multiple.
The research house said in a note today that the growth in retail operations’ profit was modest at 5% year-on-year while that of hire purchase segment declined 9.6% year-on-year for 9MFY14.
"Moving forward, capital one financial (COF) pressures are unlikely to abate. This is due to the tight liquidity of the domestic banking sector leading to strong competition for deposits which will consequently raise COFs," it added.
Also, loan growth for the group’s retail operations, hire purchase and SME loans have moderated, it said.
Public Bank announced yesterday its net profit grew 13% on-year to RM1.19 billion for its third financial quarter ended Sept 30, 2014 (3QFY14) from RM1.05 billion, on higher net interest income, net fee and commission income, and lower loan impairment allowances.
The bank said in a filing with Bursa Malaysia yesterday that its 3QFY14 revenue also grew 11.6% on-year to RM4.32 billion, from RM3.87 billion.