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ACB [O-PF +17.8%] - Steady resolution of NPLs but unwilling to preempt guidance - Update

We maintain our target price and issue an OUTPERFORM rating on ACB because the Bank was able to report 10.5% PAT growth while following its guidance to clean up its balance sheet. 1Q16 core banking metrics showed incremental improvements. Credit growth 1Q16 was 7.6%, the fastest 1Q pace since 2009, and NIM ticked up to 3.2% from 3.1% of both FY15 and 1Q15. Strong financial performance allowed ACB to “surge” some provision expense.