Maybank stronger earnings & attractive dividend

• Reported a 14.8% YoY increase in 1HFY11 earnings, while 2QFY11 earnings were up 9.4% QoQ. Loan loss provisions declining 55.6% QoQ.
• Declared a net dividend per share of 21 sen, (cash 3 sen & a re-investment electable portion of 18 sen). This translates into an attractive net dividend payout of 71.4%. Maybank will continue with its dividend reinvestment plan, its average net dividend payout ratio is likely to come in above the guided 40%-60% pure cash dividend payout guidance.
• Currently evaluating proposals on how best to reduce its stake in Bank Internasional Indonesia (BII) to 80% by June this year. The Indonesian market regulator has given it until June to meet a 20% free float requirement for BII. 
• Maybank, which held about 97.5% of BII, has already managed to sell less than 1% in the market and is also looking at undertaking private placements.

MAYBANK : Target Price RM10.07