KUALA LUMPUR: Hwang DBS Vickers Research has raised Hong Leong Bank's FY11-13F EPS by 3%-5% and upped the Target Price to RM11.80.
It said on Friday, April 1 that on its own, Hong Leong Bank's earnings are expected to grow at three-year CAGR (FY10-13) of 16%, supported by 12%-15% loan growth.
'It could leverage on its low loan-to-deposit ratio (57% vs industry average of 82%) to further drive loan growth. Its robust asset quality (2.08% gross NPL ratio vs industry average of 3.59%) means lower risk of NPLs.
'Non-interest income, largely from transactional banking and treasury business, could also support earnings given mounting competitive pressure on NIM,' it said.
HDBSVR believed the bank's strong credit cards franchise can overcome the challenge of tighter rules imposed by BNM recently.
It added Hong Leong Bank's regional strength continues to be driven by 20%-owned Bank of Chengdu, which it expects to grow 20% yoy over FY11-13 and contribute 12% to group pre-tax profit.
''
It said on Friday, April 1 that on its own, Hong Leong Bank's earnings are expected to grow at three-year CAGR (FY10-13) of 16%, supported by 12%-15% loan growth.
'It could leverage on its low loan-to-deposit ratio (57% vs industry average of 82%) to further drive loan growth. Its robust asset quality (2.08% gross NPL ratio vs industry average of 3.59%) means lower risk of NPLs.
'Non-interest income, largely from transactional banking and treasury business, could also support earnings given mounting competitive pressure on NIM,' it said.
HDBSVR believed the bank's strong credit cards franchise can overcome the challenge of tighter rules imposed by BNM recently.
It added Hong Leong Bank's regional strength continues to be driven by 20%-owned Bank of Chengdu, which it expects to grow 20% yoy over FY11-13 and contribute 12% to group pre-tax profit.
''
No comments:
Post a Comment