[ET Net News Agency, 11 July 2018] Credit Suisse cut its target price for Industrial &
Commercial Bank of China (ICBC)(01398) to HK$7.5 from HK$8.6, and reiterated its
"outperform" rating.
The research house lowered its FY2018-20 by 3-6% mainly to account for the higher loan
reserve. It expects ICBC to report earnings growth that will track roughly in line with
its asset growth of 7% in 2018.
Credit Suisse adjusted its credit cost estimate for ICBC to 91bp in 2018 (from 86bp) due
to the IFRS 9 impact and increase in reserve ratios. It now expects ICBC to keep its
credit cost flat YoY, which implies an 8.7% increase in loan loss provisions. Credit
Suisse estimated that reserve-toloan ratio for the bank could rise to 2.78% by end-2018.
(KL)