Gelonghui, November 25, 丨 China Financial Research Report said that Bank Hong Kong (2388.HK) was the first choice among banks in Hong Kong, believing that the improvement in fundamentals came not only from the current round of interest rate hikes, indicating that its balanced revenue structure, sound asset quality, and unique strategic positioning are all important sources for further improvement in future profitability. The report mentioned that Bank of China Hong Kong's average ROA from 2010 to 2021 was 1.1% and 12.6%, respectively, second only to Hang Seng Bank (0011.HK).

The bank said that in the short to medium term, rising interest rates will help drive the performance of BOCHK Hong Kong to improve. It is expected that the company's adjusted interest spreads from 2022 to 2023 will increase by 29 and 27 basis points, respectively, to 1.38% and 1.65%, respectively.

CICC said that Bank of China Hong Kong's domestic housing exposure risk is manageable. By the end of the first half of the year, 78% of its exposure was to state-owned enterprise customers, and its credit cost performance was significantly superior to that of peers. As the improvement in interest spreads was better than expected, BOC's earnings estimates for this year and next two years were raised by 3% and 3.2%, respectively, to HK$30.687 billion and HK$38.542 billion respectively. The bank maintained the BOC's “outperform the market” rating and target price of HK$32.38.