[ET Net News Agency, 19 February 2021] Hang Seng Bank (HSB) (00011) is due to report 2H
earnings on 23 February. Citi Research noted that consensus EPS of HK$8.79 is -32% YoY, 5%
below the research house's estimate.
Citi sees mid-single-digit downside risk to FY2021 consensus from NIM (net interest
margin). Based on HSBC Asia's 3Q 2020 NIM trends, Citi estimated that HSB's 3Q NIM might
have declined 25bps QoQ to 1.55% and could further decline to 1.50% in 4Q.
The research house said HK banks NIM might only bottom in 1Q 2021 as the average 1M
HIBOR is down another -13bps QoQ.
Trading on 1.6x FY2021 P/B and 9.3% RoE, Citi sees very limited upside for HSB. Rally in
the share price is likely driven by a reduction in short positions, as HSB is one of the
most shorted names among HK banks, as well as expectations of an improving macro outlook.
Citi maintained its "sell" call on HSB, with a target price of HK$120. (KL)
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00011 HANG SENG BANK
Nominal 
95.900 +0.350 (+0.366%) Others
19/02/2021 16:34
{I-bank focus}Citi cautious on Hang Seng's FY2021 outlook
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