[ET Net News Agency, 19 April 2018] Credit Suisse assumed coverage on Postal Savings
Bank of China (PSBC)(01658) with an "outperform" rating and a target price of HK$6 (from
HK$5.9).
The research house adjusted its FY2018-19 by 5-9%. It believes PSBC's unique business
model with a very low loan-to-deposit ratio of just 45% should benefit in the current
macro and regulatory backdrop.
It believes PSBC's profit growth is likely to gain momentum into 2018 on the back of
further margin expansion of 8bp on improving asset yields vs relatively more stable
funding costs, while the bank still targets 15% loan growth to achieve 50% loan-to-deposit
ratio target by end-2018.
As the fee income continues to grow, mostly driven by the bank card fees, Credit Suisse
estimated PSBC to be able to maintain 11-13% PPoP growth, even assume a double-digit
expense increase over the next two years. Also, it estimated credit cost to be lower to 59
bp from 64 bp in 2018 on system wide asset quality improvement. (KL)
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01658 PSBC
Nominal 
4.090 +0.030 (+0.739%) Others
19/04/2018 11:58
[I-bank focus]Credit Suisse restarts PSBC (01658) at HK$6
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