中金：维持东亚银行中性评级 升目标价至14.12港元

Core Viewpoint - CICC maintains its forecast for East Asia Bank (00023) unchanged, adjusting the target price upward by 25% to HKD 14.12, reflecting a 4.4% upside potential based on current trading at 0.4X P/B for 2025E/2026E [1] Group 1: Financial Performance - The bank's operating income for 1H25 decreased by 2.1% year-on-year, in line with expectations, primarily due to the decline in HIBOR compressing the interest margin [1] - Net interest income for 1H25 fell by 10.7% year-on-year and 11.5% quarter-on-quarter, slightly more than peers, due to concentrated credit exposure in Hong Kong and mainland China, where interest rate cuts have pressured margins [2] - Non-interest income showed strong performance, with other non-interest income increasing by 50.5% year-on-year, driven by foreign exchange gains; fee income reached HKD 1.65 billion, up 16.6% year-on-year, benefiting from high demand in cross-border wealth management [3] Group 2: Credit Quality and Provisions - Credit costs have decreased from high levels, contributing to better-than-expected net profit; provisions for 1H25 were down 11.9% year-on-year, with a credit cost of 0.95% [4] - The bank reported a decline in the non-performing loan (NPL) ratio to 2.63%, with a slight decrease in the provision coverage ratio to 37.3% [4] - The bank remains cautious about future credit costs, expecting them to not be lower than 1H25 levels, considering potential asset quality deterioration in the second half of 2025 [4] Group 3: Dividend and Capital Management - The bank maintained a stable dividend of HKD 0.39 per share for 1H25, with a dividend payout ratio of 45.3%, consistent with previous years [5] - Starting in 2025, the bank will adopt Basel III, resulting in a 25% year-on-year decrease in RWA and a 6.1 percentage point increase in the core Tier 1 capital ratio to 23.7% [5]