Acquires Bank Ina, Indonesia
*To acquire 80% for indicative RM138.1m (blended P/B of 1.7x) with option to acquire another 18.01% (for 3.15x P/B).
*Bank Ina is small with 22 branches as well as FY09 net profit of RM4.7m but has strong asset quality.
* Marginal impact (-0.2%) on earnings while it has ample excess capital to complete the deal without jeopardizing its capital ratios.
* Neutral – gains access to fast growing market with low penetration at decent pricing and potential M&A in Indonesia in the future (given Bank Ina’s strong capital position). Offset by marginal impact on earnings and lack of size to compete with the big players.
* Maintain HOLD, TP: RM3.19 (Gordon growth – ROE of 9.8% and WACC of 9.9%).