Affin raised its call on the country's fifth-largest bank AMMB Holdings Bhd to 'add' from 'reduce', citing a strong earnings outlook on the back of the lender's acquisitions of a general insurer and a credit card issuer.

In April, AMMB and Insurance Australia Group Ltd 's associate AmG Insurance Bhd bought Kurnia Insurance Bhd for RM1.55 billion (US$503.90 million). Three months later, AMMB proposed to acquire credit card issuer MBF Holdings Bhd and its units for 623.4 million ringgit.

"In our view, AMMB has mapped out sound operational strategies to maintain a steady earnings profile and ensure balance sheet mismatch risks are minimized," Affin said in a note on Thursday.

The research house lifted its target price on AMMB shares to RM6.62 from RM6.38 and raised its earnings estimate for the financial year 2013 by 4.2 percent and 2014 by 6.1 percent.

AMMB shares were up 0.16 per cent at RM6.34 while the Malaysian benchmark stock index rose 0.17 per cent. - REUTERS