PBBank had a good FY2007

On January 21, PBBank has announced its results for FY2007. The results for FY2007 was very impressive with continuous quarterly growth in revenue for 8 quarters and nearly continuous growth in net profit for the same periods (except for a drop in QE30/9/2006*).

For the 4Q2007, its net profit increased by 6.7% q-o-q or 30.3% y-o-y to RM580 million, while turnover increased by 6.6% q-o-q or 17.8% y-o-y to RM2573 million.

Based on yesterday's closing price of RM11.60, PBBank is now trading at a trailing PE of 18.4 times (using the past 4 quarters' EPS totaling 63 sen) & at a P/Book of 4.2 times (using its NTA per share of RM2.79 as at 31/12/2007). At these multiples, PBBank is relatively high priced.



Looking at the chart below, you can see that the price run-up has been quite sharp in the past 1-2 years. If the 1999 & 2004 run-up can be used as a guide, the present run-up could be nearing the tail end.


Chart: PBBank's monthly chart as at February 14, 2008 (courtesy of Quickcharts)

Despite its strong fundamental (not discussed here) & its very steady growth track record, I believe that the stock maybe fully priced. For those looking for steady yield & who has a long time horizon, PBBank may still be a good investment. If you are looking for capital gain, you should look at other stocks.

*The drop was mainly due to a gain on disposal of shares in a subsidiary of RM22.1 million in the preceding quarter (QE30/6/2006) coupled with an additional specific allowance of RM12.2 million made during the 3rd quarter (QE30/9/2006) resulting from the adoption of 20% specific allowance on all non-performing loans which are less than 6 months in arrears. Excluding these one-off effects, the pre-tax profit had grown by RM26.0 million or 4.4% due to a growth in net interest income and income from Islamic Banking operations by RM26.2 million and other operating income by RM8.0 million, partially offset by a higher operating expenses by RM7.2 million.