KUALA LUMPUR – CGS-CIMB Research expects that the passing of Public Bank Bhd’s (PBB) founder Tan Sri Teh Hong Piow will not materially affect the outlook and strategic direction of the bank as it is backed by a strong management team.
Teh, 92, who is also the chairman emeritus and adviser of PBB passed away at 10.20am yesterday.
In a note, the research house said the bank initiated its succession plan years ago when Teh relinquished his chief executive officer position and was redesignated non-executive chairman of PBB on July 1, 2002.
The current management team includes Tan Sri Tay Ah Lek as managing director and CEO, Datuk Chang Kat Kiam as deputy CEO, and Chang Siew Yen as senior chief operating officer.
“The news could have a near-term knee-jerk effect on the share price of PBB but we foresee limited impact from this on the near-term earnings outlook of the bank.
“As such, we reiterate our ‘add’ call on the stock premised on the potential re-rating catalyst from it having one of the lowest credit costs among its peers should the economic environment deteriorate in 2023 and from potential write-back in management overlay,” said CGS-CIMB.
Meanwhile, Maybank Investment Bank Bhd said the late Teh has left PBB in much capable hands, and it should be business as usual for the banking group.
“We maintain a ‘hold’ call for PBB with an unchanged target price of RM5,” it added.
At 10.30am, Public Bank shares stayed flat at RM4.40 with 1.52 million shares changing hands. – Bernama, December 13, 2022
