On 12 Oct 24, the MOF updated its countercyclical supportive policies and structural reforms to achieve high quality growth. The key positives are initiatives to resolve local government debt and substantially increase the debt limit. Finer details of the policies are lacking due to pending approval by the Standing Committee of the NPC. Overall, these are positive but we downgrade the banking sector to MARKET WEIGHT due to the potential EPS and ROE dilution on SOE banks from the capital injectio...
The independent financial analyst theScreener just slightly lowered the general evaluation of AGRICULTURAL BANK (HK), active in the Money Center Banks industry. The title has lost a star(s) at the fundamental level and now shows 2 out of 4 stars. Its exposure to market risk remains nonetheless the same and can be still described as defensive. theScreener slightly downgrades the general evaluation to Slightly Positive for the title on account of the lost star(s). As of the analysis date March 8, ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
China regulators will impose a cap on domestic banks’ lending to the real estate sector. For Tier-1 large-scale banks, loans to developers will be capped at 40% while mortgage lending will be capped at 32.5% of their outstanding credit. The new rule shows that the regulators are firm in their stance in preventing speculation on the property market. There is limited impact on banks, but property market demand is expected to be hit hardly, which will then further tighten the developers’ liquidity ...
On Tuesday, the media reported that Shanghai Pudong Development Bank, along with China Merchants Bank, or CMB, and Bank of Communications, or BOCOM, were found in contempt for refusing to comply with subpoenas in a North Korea sanctions violation investigation conducted by a U.S. judge. The H-Shares of CMB and BOCOM declined by 7.7% and 3.7%, respectively, though both companies officially denied involvement in any investigations related to possible violations of sanctions, and are in compliance ...
On Tuesday, the media reported that Shanghai Pudong Development Bank, along with China Merchants Bank, or CMB, and Bank of Communications, or BOCOM, were found in contempt for refusing to comply with subpoenas in a North Korea sanctions violation investigation conducted by a U.S. judge. The H-Shares of CMB and BOCOM declined by 7.7% and 3.7%, respectively, though both companies officially denied involvement in any investigations related to possible violations of sanctions, and are in compliance ...
The country's third-largest bank by assets, Agricultural Bank of China boasts a dominant position in county areas and sector-leading network scale that reward it with enviably low funding costs and a narrow economic moat.With over 20,000 outlets covering all county areas and a prestige brand for rural banking, ABC enjoys the largest deposit base. It also benefits from a sticky retail customer mix and offers more diversified financial services than its major competitors, Postal Savings Bank of Ch...
As expected, first-quarter results of narrow-moat Agricultural Bank of China's indicated rising pressure on net interest margin, or NIM, for the large Chinese banks as the impact of monetary easing has gradually translated to lower margins for its bank lending business, since the fourth quarter of 2018. Though, the slowdown in net interest income (at 1.4% versus 14% in the year-ago period) came in a bit lower than our expectation, its strong fee income recovery at 25% resulted in the total reven...
As expected, first-quarter results of narrow-moat Agricultural Bank of China's indicated rising pressure on net interest margin, or NIM, for the large Chinese banks as the impact of monetary easing has gradually translated to lower margins for its bank lending business, since the fourth quarter of 2018. Though, the slowdown in net interest income (at 1.4% versus 14% in the year-ago period) came in a bit lower than our expectation, its strong fee income recovery at 25% resulted in the total reven...
As expected, first-quarter results of narrow-moat Agricultural Bank of China's indicated rising pressure on net interest margin, or NIM, for the large Chinese banks as the impact of monetary easing has gradually translated to lower margins for its bank lending business, since the fourth quarter of 2018. Though, the slowdown in net interest income (at 1.4% versus 14% in the year-ago period) came in a bit lower than our expectation, its strong fee income recovery at 25% resulted in the total reven...
With 11.5% and 5.1% respective growth in revenue and net profits, narrow-moat Agricultural Bank of China's 2018 results were strong across the board. The results confirmed our view that ABC will continue to outperform large peers due to its low funding costs and improving operating efficiency in the near term, underpinned by strong deposit franchise and growth momentum. As the results were largely in line, we retain our fair value estimates at CNY 4.20 for the A shares and HKD 4.80 for the H sha...
With 11.5% and 5.1% respective growth in revenue and net profits, narrow-moat Agricultural Bank of China's 2018 results were strong across the board. The results confirmed our view that ABC will continue to outperform large peers due to its low funding costs and improving operating efficiency in the near term, underpinned by strong deposit franchise and growth momentum. As the results were largely in line, we retain our fair value estimates at CNY 4.20 for the A shares and HKD 4.80 for the H sha...
With 11.5% and 5.1% respective growth in revenue and net profits, narrow-moat Agricultural Bank of China's 2018 results were strong across the board. The results confirmed our view that ABC will continue to outperform large peers due to its low funding costs and improving operating efficiency in the near term, underpinned by strong deposit franchise and growth momentum. As the results were largely in line, we retain our fair value estimates at CNY 4.20 for the A shares and HKD 4.80 for the H sha...
Following the People's Bank of China's announcement that it will launch central bank bill swaps to improve the liquidity of banks' perpetual bonds, we’re maintaining our fair value estimates for the Chinese banks we cover. According to the central bank’s statement, primary dealers engaged in an open-market operation are allowed to swap the perpetual bonds they hold for the central bank bills. Banks' perpetual bonds with ratings no lower than AA will be included as qualified collateral for a ...
Following the People's Bank of China's announcement that it will launch central bank bill swaps to improve the liquidity of banks' perpetual bonds, we’re maintaining our fair value estimates for the Chinese banks we cover. According to the central bank’s statement, primary dealers engaged in an open-market operation are allowed to swap the perpetual bonds they hold for the central bank bills. Banks' perpetual bonds with ratings no lower than AA will be included as qualified collateral for a ...
Following the People's Bank of China's announcement that it will launch central bank bill swaps to improve the liquidity of banks' perpetual bonds, we’re maintaining our fair value estimates for the Chinese banks we cover. According to the central bank’s statement, primary dealers engaged in an open-market operation are allowed to swap the perpetual bonds they hold for the central bank bills. Banks' perpetual bonds with ratings no lower than AA will be included as qualified collateral for a ...
We see China’s latest cut in its reserve requirement ratio as having limited impact on the valuations of the Chinese banks we cover. We believe the benefits of liquidity injection are largely offset by downward pressure on net interest margin, given weaker loan pricing and intense deposit competition. Our top picks are Agricultural Bank of China and Industrial & Commercial Bank of China, which are trading at 29% and 26% discounts to our fair value estimates, respectively. Assuming other assum...
We see China’s latest cut in its reserve requirement ratio as having limited impact on the valuations of the Chinese banks we cover. We believe the benefits of liquidity injection are largely offset by downward pressure on net interest margin, given weaker loan pricing and intense deposit competition. Our top picks are Agricultural Bank of China and Industrial & Commercial Bank of China, which are trading at 29% and 26% discounts to our fair value estimates, respectively. Assuming other assu....
Narrow-moat Agricultural Bank of China's, or ABC's, preprovisioning operating profit PPOP growth continued to lead large peers at 18% over the past three quarters. Third-quarter PPOP growth further accelerated to 21% from the year-ago period, underpinned by its 19.5% growth in fee income, over 250% surge in investment return and significant improvement in operating efficiency. ABC's improving trend in operating efficiency was contrary to most peers which saw difficulties in reducing the cost/inc...
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