[ET Net News Agency, 11 January 2018] Nomura Research lifted its target price for China
Merchants Bank (CMB)(03968) to HK$19.28 from HK$16.22, and maintained its "reduce" rating.
The research house said relative to CMB's deposit cost of merely 1.24% p.a. as of 1H
2017 was the lowest among covered banks - even below the average of 1.41% for the big-four
banks.
CMB achieved low deposit cost thanks to the high proportion of CASA in its retail
deposits, which was as high as 76% by 1H 2017. However, into 3Q 2017, CMB's deposit growth
slowing down fast, led by retail deposits - which now account for 31% of the bank's total
deposits versus the 52% of retail loans out of the total loan book on the other side.
As market rates keep rising, Nomura sees CASA of CMB's retail deposit likely under
pressure, especially as China unwinds WMPs and alternative financial products offer
increasingly attractive yields. (KL)
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03968 CM BANK
Nominal 
35.850 +1.550 (+4.519%) Others
11/01/2018 14:18
[I-bank focus]Nomura lifts CM Bank (03968) to HK$19.28
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