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MBB [O-PF +17.0%] - Transformation improved NIM but high growth yet to be realized - Update

We slightly lower our target price by 0.5% due to a higher deposit growth forecast for 2017 and 2018. We issue an OUTPERFORM rating despite the lower TP due to recent price declines. Projected 11.8% NPAT growth in FY16 is driven mainly by 29.9% decline of provision expense. Modest 4.3% 2017 NPAT growth as NIM is forecast to reduce by 15.5 bps because of higher deposit growth and continued maturity of high yield government bonds.