[ET Net News Agency, 19 April 2018] Credit Suisse assumed coverage on Agricultural Bank
of China (ABC)(01288) with an "outperform" rating, and a target price of HK$5.4.
The research house adjusted its FY2018-19 by 3-6%. It said ABC has one of the cheapest
funding bases and a low LDR of 65% that is well positioned to benefit from rising funding
costs and interbank rates amid increasing regulatory tightening.
ABC's strong funding from rural areas (Sannong finance) with the highest CASA ratio and
the cheapest retail funding will see slower rise in deposit costs, while enjoying widening
spread as banks continue to pass some of the higher funding costs to borrowers.
Credit Suisse expects the bank's NIM to expand by another 8bp in 2018, along with ~9%
loan growth, and thus, drive 9% PPoP growth this year. As per management, ABC has already
cut high risk loans by Rmb400bn during 2016-17 and has been proactively charging off NPLs.
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01288 ABC
Nominal 
3.510 -0.040 (-1.127%) Others
19/04/2018 15:30
[I-bank focus]Credit Suisse restarts ABC (01288) at HK$5.4
| Remark: | Real time quote last updated: 26/04/2024 18:00 |
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