[ET Net News Agency, 11 January 2018] Nomura Research lifted its target price for Bank
of China (BOC)(03988) to HK$4.25 from HK$3.94, and maintained its "neutral" rating.
The research house said BOC saw a 3.35% p.a. return on assets (as of 1H 2017), of which
loan yield was 3.89%, both the lowest of the big four banks; its funding cost was 1.65%
with deposit cost being 1.52%, both the highest of the big four banks.
While Nomura sees BOC benefiting from better loan yield, its funding cost may also pick
up faster than the rest of the large banks. The research house forecast BOC's asset yield
to improve by 8bp/5bp y-y in FY2018/19 to 3.44%/3.49%, and its funding cost up 7bp/2bp in
the same period to 1.86%/1.88%, resulting in a 2bp/3bp y-y improvement in its NIM. (KL)