PBBank's net profit jumped in 1Q2008

PBBank has just announced its results for its 1Q2008 ended 31/3/2008. Its net profit increased by 23.7% q-o-q or 50.6% y-o-y to RM717.4 million, while its revenue increased by 2.4% q-o-q or 19.3% y-o-y to RM2.64 billion. The improved performance was attributable to:

1. increase in Interest Income of 15% (while interest margin remained at 44%); and
   
2. increase in Other Operating Income of 93% vis-a-vis a 16%-increase in Other Operating Expenses.
   

Its net profit for the last 4 quarters amounted to RM2.37 billion, representing an increase of 21.7% over the net profit of RM1.81 billion recorded in the preceding 4 quarters. Revenue had also increased by 21.7% from RM8.26 billion to RM10.05 billion for the periods under consideration.



PBBank (closed at RM10.90) is now trading at a trailing PE of 15.4 times. At this PE, PBBank may appear fairly valued. However, the management has been able to grow the bank's operation very well in the past, and we can expect the same to continue.


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

Based on continued growth in its bottomline, PBBank remained an attractive bank stock. As observed in my previous post, I believe that PBBank's upside appreciation may be limited. However, the stock has a very good dividend track record. In FY2007, it paid dividend totaling 65%, while in FY2006, it paid dividend totaling 50%. Assuming it maintains its dividend at 65% for FY2008, the dividend yield will be 6.0%.