[ET Net News Agency, 12 July 2018] Credit Suisse lowered its target price for Bank of
China (BOC)(03988) to HK$4.7 from HK$4.9, and reiterated its "outperform" rating.
The research house lowered its FY2018-20 earnings forecasts by 5-7% mostly to account
for higher loan loss provisions. It expects BOC's core earnings growth to track roughly in
line with its asset growth of 7% in 2018.
Credit Suisse adjusted its credit cost estimates for BOC to 81bp in 2018 (from 62bp),
despite the bank posted a 30% YoY decline in 1Q credit costs. It believes the bank targets
flattish YoY credit cost in 2018 (though remain the lowest among Big 4) to build its
reserve-to-loan ratio towards 2.54% by end-2018. (KL)