[ET Net News Agency, 12 July 2018] Credit Suisse lowered its target price for Bank of
Communications (Bankcomm)(03328) to HK$6 from HK$6.6, and reiterated its "neutral" rating.
The research house tweaked its 2018-20 EPS forecasts by 1-2% to account for the higher
credit cost estimates partly offset by the lower operating expense. On core earnings, we
continue to expect margin pressure for Bankcomm.
Credit Suisse expects Bankcomm's NPL ratio to see a moderate increase from 1.50% in
FY2017 to 1.6% in 2018. This is due to both pressures from corporate NPLs, as well as less
write-offs as the bank needs to build its reserve-to-loan ratio toward 2.5% from 2.3% in
end-2017 in comparison to the sector's average of 3%.
Credit Suisse also expects NIM to further decline in 2018 and possibly stabilise with a
moderate improvement in 2019. The cut back in operating expense growth will help drive an
11% PPoP growth in 2018. (KL)
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03328 BANKCOMM
Nominal 
5.510 +0.070 (+1.287%) Others
12/07/2018 11:25
[I-bank focus]Credit Suisse cuts Bankcomm (03328) to HK$6
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