WHAT AN ACHIEVEMENT FOR TEH HONG PIOW: DESPITE LACK OF UMNO HELP & CHUNKY GOVT DEALS, PUBLIC BANK CLOSES IN ON MAYBANK FOR TOP BANK TITLE

PETALING JAYA – Public Bank Bhd (PBB) is closing in on Malayan Banking Bhd(Maybank) for the title of Malaysia’s most valuable bank.

The market capitalisation of the country’s second-largest bank has gone up 8% so far this year to RM77.2bil as its share price settled at an all-time high of RM20 yesterday.

At the same time, shares in Maybank have dropped 6.4% year-to-date at its closing price of RM7.86 yesterday, reducing its market value to RM80.1bil.

With less than RM3bil separating the two banks, analysts are divided on which bank they would rather pick.

CIMB Research, in a recent note, had a buy call on Maybank and a hold rating on PBB.

“We like Maybank for its extensive regional network and presence in under-penetrated markets like Indonesia and the Philippines,” it said.

CIMB Research also noted that Maybank is ranked among the top-three in most market segments in Malaysia.

In the meantime, loan growth at PBB had slowed down in September, although the pace was still “significantly” stronger compared with the industry’s average, CIMB Research said.

Unlike Maybank, which derives a significant and growing portion of its income from overseas, PBB is focused on the Malaysian market which contributes more than 90% of its profits.

This gives the bank some sort of defensive quality.

Shares in PBB hit an all-time high of RM20 after gaining 14 sen yesterday.

A banking analyst told StarBiz that this indicated that there was still “much interest in quality”, as PBB was a clear leader in terms of asset quality, growth and cost-to-income ratio, among other factors.

“It shows that there is still much interest in quality and PBB is head and shoulders above the rest in this sense.

“This is in terms of asset quality, growth, return on equity and prudence, among other things,” he said.

Another analyst, who declined to be named, agreed, saying that the share performance could be due to PBB having the best asset quality.

“Its cost-to-income ratio is also the best,” he noted.

From a total of 24 analysts who cover the stock, half have a buy call on PBB, data from Bloomberg showed. Their average target price is RM20.51.

ANN