[ET Net News Agency, 23 February 2018] Morgan Stanley said Bank of East Asia
(BEA)(00023) reported lackluster core PPoP (down 10% HoH and 3% HoH) as China NIMs were
affected by rate moves (HK was strong) and costs picked up.
It noted that Hang Seng Bank's (00011) core PPoP was up 18% YoY and 5% HoH.
Asset quality improved (both headline NPL and credit costs declined), and BEA is looking
at growth from 2018, especially in China consumer book, but a pickup in core earnings will
likely remain tough, trailing local HK banks, said the research house.
Moving ahead, Morgan expects some cost increase as inflation picks up and BEA spends on
technology and new initiatives (for instance, it has hired 200 employees for its mainland
retail push).
Morgan maintained its "underweight" rating and HK$30 target price on the stock, given
weak ROE profile, in contrast to other HK banks. (KL)
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00011 HANG SENG BANK
Nominal 
98.600 +1.600 (+1.649%) Others
23/02/2018 15:53
[I-bank focus]Bank of East Asia's core PPoP lackluster - MS
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