Glonghui, April 29 | Goldman Sachs released a report indicating that the Bank of Communications's profit and net profit both beat the bank's expectations before making the first quarter, and the net interest spread increased to 1.2% quarterly, 11 basis points higher than the bank's expectations. The increase in net interest spreads mainly accelerated to 7% year-on-year growth in credit loans, which was higher than the 4% year-on-year increase in total assets; the share of high-yield loans in interest-bearing assets expanded, boosting the yield on interest-bearing assets. In summary, bank loans grew faster than deposits (2% year-on-year increase), leading to a quarterly improvement in net interest spreads. However, investors are more concerned about transaction risk-weighted assets (RWA) and capital conditions. According to the report, the Bank of Exchange did not disclose the RWA status, so Goldman Sachs is unaware of the Bank's RWA density in the first quarter, but believes that the RWA density increased in the first quarter because high-risk weighted assets, such as loans, grew faster than total assets. The report slightly raised the Bank's net interest spread and credit cost forecasts. Earnings estimates for this year and next two years were raised by 5% and 4% respectively, net profit forecasts were raised by 1% each, and the target price for H shares was raised from HK$3.3 to HK$3.43, maintaining the “sell and sell” rating.