VPB accounts for <1% of group pretax profit. Immaterial impact from consolidation of stake.
Overseas operations make up just 7% of group earnings.
Maintain SELL with an unchanged TP of MYR19.20 (FY14 P/BV of 2.7x).
Public Bank’s foreign operations comprise its presence in Hong Kong (through Public Bank (HK), Public Finance and Winton Group), Vietnam and Cambodia (through Cambodia Public Bank, which had 25 branches end-2013). Overseas earnings accounted for 6.6% of group net profit in 2013.
This move is neutral on the group. We maintain our SELL call on Public Bank with an unchanged TP of MYR19.20 (FY14 P/BV of 2.7x).
Source: Maybank Research - 17 Jul 2014
Overseas operations make up just 7% of group earnings.
Maintain SELL with an unchanged TP of MYR19.20 (FY14 P/BV of 2.7x).
What’s New
Public Bank is to acquire the remaining 50% stake in VID Public Bank (VPB) that is currently held by Bank for Investment and Development of Vietnam, for a cash consideration of USD76.6m (MYR245m). VPB will become a wholly-owned subsidiary of Public Bank, who will then apply to the State Bank of Vietnam to convert VPB from a joint venture bank to a 100% foreign-owned bank in Vietnam.What’s Our View
As at end-Dec 2013, VPB had 7 branches in Vietnam. It reported a pretax profit of USD5.2m in 2013, representing about 0.4% of group earnings during the period. Total loans amounted to USD242.5m as at end-Dec 2013, also making up about 0.4% of group loans.Public Bank’s foreign operations comprise its presence in Hong Kong (through Public Bank (HK), Public Finance and Winton Group), Vietnam and Cambodia (through Cambodia Public Bank, which had 25 branches end-2013). Overseas earnings accounted for 6.6% of group net profit in 2013.
This move is neutral on the group. We maintain our SELL call on Public Bank with an unchanged TP of MYR19.20 (FY14 P/BV of 2.7x).
Source: Maybank Research - 17 Jul 2014
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