KUALA LUMPUR: CIMB Equities Research keeps AMMB an OUTPERFORM and its top pick for the banking sector.

It said on Tuesday, Feb 9 the upside for AMMB was potential re-rating catalysts of value-add from ANZ, benefits from the group revamp, potential rise in investment banking income, and new growth avenue from the foreign exchange and derivative businesses.

AMMB's 9MFY3/10 net profit climbed 12.6% yoy to RM766.9m, 6-9% ahead of itsr forecast and consensus on an annualised basis.

The outperformance stemmed primarily from lower-than-expected overheads. From 6% yoy in Jun-Sep 09, loan growth perked up to 11.1% yoy in Dec 09. Net NPL ratio improved further from 2.2% in Sep 09 to 1.8% in Dec 09.

"Although we are raising our net earnings forecasts by 1-7%, we retain our DDM-based target price of RM6.30 due to the increase in share base from a special issue. The record earnings in 3Q and the improvements in loan growth and asset quality support our view of favourable prospects," it said.