Business As Usual At Public Bank

Public Chairman and Founder, Tan Sri Teh’s demise marks the departure of an icon in the banking industry. Nevertheless, he leaves the bank in many capable hands and it should be business as usual at Public Bank says Maybank IB analysts. The house is maintaining a HOLD call with an unchanged TP of MYR5.00.

With a 23.4% stake in the bank, Tan Sri Dato’ Sri Dr Teh Hong Piow, aged 92, has passed away. He founded the bank at the age of 35, back in 1965. Tan Sri Teh retired as Non-Executive Chairman of the bank on 31 Dec 2018 and was conferred the title of Chairman Emeritus and Adviser of Public Bank on 1 Jan 2019.

Maybank IB is of the view that while much as his presence will be missed, it should be business as usual at the banking group, for he has left the bank in capable hands. The management of Public Bank remains intact with Lai Wan (aged 79) as Chairman, Tan Sri Tay Ah Lek (79) as MD, and Dato’ Chang Kat Kam (67) as Deputy CEO. The two Senior Chief Operating Officers are Ms Chang Siew Yen (53) and Dato’ Sulaiman Abd Manap (65)

Valuations for the group are still high, highTan Sri Teh who held a substantial stake in the bank, with a closing price of MYR4.40 would be worth RM19.9b. Public Bank trades at a sector-leading historical PBV of 1.7x, though this is justified in terms of its ROE (FY22E: 12%) which is also the highest in the industry. Any M&A being considered could prove to be a costly exercise for any domestic acquirer.

We would expect the shareholding to go into a family trust, at this stage

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