Core Insights - East West Bancorp, Inc. achieved record levels in multiple financial categories for 2025, including revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits, reflecting a strong business model during uncertain economic conditions [4][3][12] - The company reported a 6% year-over-year growth in end-of-period deposits and loans, with significant contributions from non-interest-bearing and time deposits, as well as commercial and industrial (C&I) and residential mortgage lending [4][5][6] - The tangible book value per share grew by 17%, and the return on tangible common equity was also 17%, leading to a 33% increase in the quarterly dividend to $0.80 per share [3][12] Deposit Growth - East West Bancorp, Inc. focused on core deposit growth in 2025, which supported loan growth and enhanced balance sheet liquidity [1] - The company plans to continue its dedicated business checking campaign into 2026 to further expand its deposit base, with expectations of strong core customer deposit growth [1][4] Loan Growth - The company anticipates total loan growth in the range of 5% to 7% for 2026, driven by continued strength in C&I and residential mortgage lending [5][13] - C&I growth was particularly strong in the fourth quarter, supported by new relationships and a robust pipeline [5][6] Net Interest Income and Margin - Fourth quarter net interest income was $658 million, benefiting from balance sheet growth and favorable deposit mix shifts, with a projected growth of 5% to 7% for 2026 [6][7] - The company has proactively reduced deposit costs, achieving a 23 basis point decrease quarter-over-quarter [6] Fee Income - Fee income grew by 12% in 2025, driven by strong performance across various fee-based businesses, and the company aims to maintain double-digit growth in fee income for 2026 [7][8][22] - Investments in wealth management and treasury management have contributed to this growth, with ongoing hiring to capitalize on market opportunities [8][22] Expense Management - Total operating non-interest expenses grew by 7.5% in 2025, with expectations of a 7% to 9% increase in 2026 due to investments in technology and talent [9][13] - The efficiency ratio for the fourth quarter was 34.5%, indicating industry-leading efficiency [9] Asset Quality - The company recorded net charge-offs of 8 basis points in the fourth quarter and 11 basis points for the full year of 2025, with non-performing assets stable at 26 basis points of total assets [10][11] - The allowance for credit losses increased slightly, reflecting a cautious approach to credit risk management [11] Capital Management - East West Bancorp, Inc. maintains strong capital ratios, with a Common Equity Tier 1 capital ratio of 15.1% and a tangible common equity ratio of 10.5% [12] - The company remains committed to delivering top-tier returns and has a flexible approach to capital management, including opportunistic buybacks [30][55]

Investment Rating - The report maintains a "BUY" rating for the company, indicating a potential return of over 15% over the next 12 months [14]. Core Insights - The company reported a strong performance in Life OPAT, with a year-on-year increase of 6.1% to RMB 27.6 billion, surpassing forecasts. Group OPAT rose 2.5% YoY to RMB 34.4 billion, and net profit increased significantly by 64.9% YoY to RMB 45.0 billion, exceeding profit alerts by 55%-70% [1]. - The company achieved a notable 57.7% increase in NBV on a like-for-like basis, despite revising down long-term investment return assumptions by 50 basis points to 4.0% [1][9]. - The report highlights the insurer's effective asset/liability management and strong fundamentals, positioning it favorably against peers [1]. Financial Performance - For FY24, net profit is projected at RMB 46.4 billion, with EPS expected to be RMB 4.67. The consensus EPS for FY25 is RMB 4.29, indicating a slight downward revision from previous estimates [2][9]. - The company's P/B ratio is expected to decline from 0.8 in FY24 to 0.7 in FY25, reflecting a more attractive valuation [2][12]. - The combined ratio for P&C insurance is projected to be 98.6% for FY24, indicating a slight deterioration compared to the previous year [12]. Valuation Metrics - The target price for the company is set at HK$34.00, representing a 37.1% upside from the current price of HK$24.80 [2][10]. - The stock is trading at 0.54x FY25E P/EV and 1.05x P/B, suggesting it is undervalued relative to its embedded value [10][12]. - The report notes a significant increase in total investment income, which soared 131% YoY to RMB 120.4 billion, driven by higher dividends and fair value gains [8]. Share Performance - The company's market capitalization is approximately HK$238.6 billion, with a 52-week high of HK$33.15 and a low of HK$14.14 [3]. - Over the past month, the stock has appreciated by 7.8%, outperforming the market [5].