[ET Net News Agency, 19 April 2018] Credit Suisse assumed coverage on China Citic Bank
(00998) with an "underperform" rating and revised down its target price to HK$4.6 (from
HK$5.5).
The research house adjusted its FY2018-19 by 1-7%. It said the bank's effort to pivot
its business towards retail banking has been overshadowed by shrinking balance sheet's
non-loan (nonstandard) assets.
While NIM will stabilise in 2018, Credit Suisse said the bank's capacity to grow its
loans will be constrained by 94% of LDR and a CET-1 ratio of 8.5% as of end-2017. It also
believes with a high opex growth and rising CIR, the bank could see earnings decline in
2018, even if we assume a moderate credit cost decline in 2018.
While management is considering issuance of convertible bonds in 2018, it is most likely
unable to provide tier 1 support in time to sustain such high growth in consumer loans,
Credit Suisse said. (KL)
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00998 CITIC BANK
Nominal 
4.850 +0.200 (+4.301%) Others
19/04/2018 12:12
[I-bank focus]CS restarts Citic Bank (00998) at HK4.6
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