[ET Net News Agency, 18 February 2020] Citi Research said Hang Seng Bank's (HSB)(0011)
2H 2019 PBT of HK$12.9bn is 7% below Citi's estimate. Revenue of HK$21.1bn is 2% below,
while opex is largely inline. Loan impairment is 31% heavier than consensus at HK$1.33bn.
Key negatives are NIM miss, soft fee income, and heavier Impairments, while key
positives include stronger loan growth, higher dividend payment and capital.
Citi expects low single-digit consensus EPS cut for HSB on the back of the earnings for
FY2019, potential mid-single-digit cut for future years if consensus were to factor in
further ECL (expected credit losses) provisions as the economy is negatively impacted by
the outbreak of coronavirus. However, long term investors should focus on HSB's stable and
growing dividend yield, hence, it reiterated its "buy" call and a target price of HK$179.
(KL)
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{I-bank focus}Citi see LSD consensus EPS cut for Hang Seng
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