Banking Sector Comparison

(A) Net Interest Margin 

• BIMB has the highest NIM while Ambank has the Lowest NIM therefore BIMB got 1 point.

(B) Gross Impaired Loan

• PBBANK has the lowest NPL while CIMB has the highest NPL. If corporate or individual started to have default loan/bankruptcy, the risk on PBBANK will be the lowest compare to other bank therefore PBBANK got 1 point. 

(C) Loan Growth Rate

• BIMB has the highest CAGR on loan while AMBANK has the lowest CAGR on loan from year 2009 - 2019 therefore BIMB got 1 point. 

(D) Net Profit Growth Rate 

• BIMB has the highest CAGR on its net profit while CIMB has the lowest CAGR on net profit from year 2009 - 2019 therefore BIMB got 1 point. 

(E) Cost to Income Ratio

• PBBANK has the lowest overhead to income ratio while BIMB & CIMB has the highest overhead to income ratio. This means that PBBANK is the strongest in controlling its cost among all bank therefore PBBANK got 1 point. 

(F) Total Capital Ratio

• MAYBANK has the highest total capital ratio while HLBANK has the lowest total capital ratio. The higher the capital ratio, the higher the reserve of the particular bank has to prevent the bank from bankruptcy. Therefore, MAYBANK got 1 point. 

(G) Return on Equity

• BIMB has the highest ROE while CIMB has the lowest ROE. This means BIMB is the most efficient bank in using its equity therefore BIMB got 1 point. 

(H) Price to Book Value

• The current price to book value of PBBANK, MAYBANK, RHB, HLBANK & AMBANK is lower than PB value in 2008 crisis when KLCI is trading at 850 points. 
• The current price to book value of CIMB and BIMB is higher than PB value in 2008 crisis when KLCI is trading at 850 points. 
• CIMB has the lowest price to book value among all banks therefore got 1 point.  
• Public Bank has the highest price to book value among all banks. 
• Public Bank has the steepest drop in price to book value from year 2008 to 2019 as compare to other banks therefore got 1 point.  

(I) Price to Earning Ratio

• The current price to earning ratio of AMBANK, MAYBANK & PBBANK is lower than PE ratio in 2008 crisis when KLCI is trading at 850 points. 
• The current price to earning ratio of BIMB, CIMB, RHB & HLBANK is higher than PE ratio in 2008 crisis when KLCI is trading at 850 points. 
• Ambank has the lowest PE among all banks therefore Ambank got 1 point. 
• Public Bank has the highest PE among all banks. 
• Maybank has the steepest drop in PE from year 2008 to 2019 as compare to other banks therefore Maybank got 1 point. 

(J) Dividend Yield

• MAYBANK has the highest DY which is 9.23% while HLBANK has the lowest DY which is 3.52% based on current price. Therefore, MAYBANK got 1 point. 
• Lets assume a 20% dividend cut from all bank due to the current market condition where bank's earning is expected to be lower. Based on current price, only MAYBANK, CIMB, RHB & AMBANK are able to maintain a dividend yield of more than 5%. 

(K) Net Interest Income over Total Income

• Bank Negara has made it compulsory for all banks to provide a 6 months moratorium to everyone to defer their loan payment for 6 months. Therefore, i have compute the percentage of net interest income over its total income to evaluate the impact of moratorium to each bank. 
• Maybank has the lowest net interest income over its total income, hence i expect the impact to Maybank will be the smallest compare to other banks. Therefore Maybank got 1 point. 
•  Public Bank has the highest net interest income over total income. 

Conclusion

• If based on the above rating score:  
• Maybank - 5 points
• Bimb - 4 points
• Public Bank - 3 points
• Cimb - 1 point
• Ambank - 1 point
• Hlbank - NIL
• Rhb - NIL
• BIMB has the greatest growth rate over the 10 years. 
• Non performing loan for Public bank, Bimb and Hlbank is lower than 1%. this is very important in tough days like this. Public Bank has the lowest NPL among all banks
• ROE of Bimb, Maybank and Public Bank is more than 10% which means they are efficient in using their own equity compare to other banks. BIMB has the highest ROE among all banks. 
• Price to book value of BIMB, Ambank, CIMB & RHB is now lower than 1. CIMB has the lowest PB value among all banks. 
•  If 10 - 11 is the reasonable PE for banking sector, then based on current price, Public bank, Maybank and Hlbank is trading at fair value. Ambank has the lowest PE followed by BIMB. 
• Maybank has the highest DY with 9.23% even if the bank decides to cut 20% of its dividend payout, the DY is still 7.38%. 
• The 6 months moratorium could impact Public bank the most and Maybank would be the least impacted.