CICC: BOC Hong Kong (02388) profits are growing steadily, and quarterly dividends are stable

The Zhitong Finance App learned that China Financial Services released a research report saying that BOCHK (02388) announced third-quarter results. Revenue for the first three quarters of this year increased 2.3% year on year, profit before tax increased 3.7% year on year, and profit after tax increased 9% year on year; revenue for the third quarter increased 9% year on year, and profit before tax increased 13% year on year. The results were in line with the forecast. The bank maintained its target price of HK$60.1 and the “outperforming the industry” rating.

The bank indicated that adjusted net interest income for the third quarter increased 5.2% year on year and 0.9% quarter-on-quarter. Asset expansion was steady. At the end of the quarter, deposits and loans increased by 4.3% and 1.5%, respectively, and average interest-bearing assets increased by about 7% year-on-year. However, deposit competition suppressed interest spreads, and the net interest spread after a single quarter was 1.52% adjusted in the third quarter, narrowing by 3 basis points quarterly.

According to the bank, net handling fee revenue fell 11.8% year on year, mainly hampered by the high base of insurance, securities brokerage and other businesses last year, as well as weakening transactions in the Hong Kong stock market. The cost-revenue ratio remained low, 24.5% per quarter; credit costs improved year-on-year and quarterly, and the annualized credit cost per quarter was 0.36%. The company announced a quarterly dividend of HK$0.29 per share, the same as the previous year, in line with CICC and market expectations.

The bank kept its revenue forecast basically unchanged, but considering the intense competition for deposits in Hong Kong, it lowered its 2026 and 2027 net profit forecasts by 1.5% and 2.6%, respectively, to HK$41.2 billion and HK$42.2 billion.