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<Research>Citi: HK Banks 2H NIM Remains Resilient; BEA Downgraded to Neutral
Recommend 23 Positive 29 Negative 19 |
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Hong Kong's banks rose 15% in 2Q, outperforming the HSI over the same period on the back of the easing concerns over asset quality and the improvement in capital returns by individual banks, according to a report by Citi Research. The recent renewed concerns over Hong Kong's CRE performance and short-term NIM headwinds have led to a pullback in bank stocks. The broker estimates that NIM will remain resilient in 2H24, while CRE loan losses will remain manageable. Among bank stocks, Citi Research prefers HSBC HOLDINGS (00005.HK), which has a RoTE of 14%-15% (excluding Canada and Argentina) and trades on 1.0x P/TB (price to tangible book value). It also introduced a 90-day positive short-term view on HANG SENG BANK (00011.HK), expecting that a new buyback programme may be announced in 2H24. BANK OF E ASIA (00023.HK) was downgraded to Neutral as its credit cost normalisation is slow and near-term upside to capital return is limited. Citi Research has revised its investment ratings and TPs for some bank stocks, as listed below: Shares | Investment Ratings | TPs (HK$) BOC HONG KONG (02388.HK) | Buy | $28.2 → $27.6 BANK OF E ASIA (00023.HK) | Buy → Neutral | $10.6 → $9.5 HANG SENG BANK (00011.HK) | Neutral | $109 → $106 HSBC HOLDINGS (00005.HK) | Buy | $74 STANCHART (02888.HK) | Neutral | $72.1 AAStocks Financial News |
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