KUALA LUMPUR, April 20 — Maybank Investment Bank (IB) Research has revised upwards its net profit forecasts on CIMB Group Holdings’s financial years (FY) 2017-2019 on anticipation of a sustained pick-up in the bank’s corporate lending and more buoyant debt capital market activity.
In a note today, Maybank IB said, CIMB’s net profit forecasts would likely increase by two per cent, seven per cent and eight per cent in the FY17-19 respectively.
It said CIMB would be the beneficiary of the upturn in the domestic business loan demand this year being the dominant player in the debt capital market.
Moreover, it said, CIMB’s robust infra project pipeline would provide support to the group’s non-interest income (NOII).
“Our loan and NOII growth assumptions are raised and we project robust FY17/18/19 net profit growth of 29 per cent/14 per cent/10 per cent to support return on equity expansion.
“We have raised our loan growth forecast for CIMB Group to 8.1 per cent/7.6 per cent/7.3 per cent for FY17-19 from 6.3 per cent/6.1 per cent/6.1 per cent before,” it said.
Following the revised projections, the research house has upgraded its rating recommendation on CIMB to ‘buy’ from ‘hold’ previously with a higher target price of RM6.30 per share.
As at 9.48am, CIMB’s share was unchanged at RM5.48 with 76,700 shares transacted. — Bernama
