Understanding the Market | BANK OF E ASIA rises over 4% after earnings, with non-interest income expected to maintain rapid growth and loan structure actively optimized

Zhitong
2025.02.21 02:02

After releasing its 2024 annual results, BANK OF E ASIA's stock price rose by more than 4%, increasing by 4.36% to HKD 11.02 at the time of publication. The bank's interest income for 2024 was HKD 39.809 billion, a year-on-year increase of 0.3%; the profit attributable to shareholders was HKD 4.608 billion, a year-on-year increase of 11.9%. China International Capital Corporation (CICC) has raised its earnings forecasts for 2025 and 2026, expecting non-interest income to maintain rapid growth. The company's loan structure has been actively optimized, with non-commercial real estate loans increasing by 34.9% year-on-year

According to Zhitong Finance APP, Bank of East Asia (00023) rose more than 4% after its earnings report, with a current increase of 4.36%, priced at HKD 11.02, and a trading volume of HKD 13.4648 million.

In terms of news, on February 21st at noon, Bank of East Asia released its performance for the fiscal year 2024, reporting interest income of HKD 39.809 billion, an increase of 0.3% year-on-year; net interest income of HKD 16.529 billion, a decrease of 2% year-on-year; profit attributable to shareholders of HKD 4.608 billion, an increase of 11.9% year-on-year; and basic earnings per share of HKD 1.52.

CICC released a research report stating that Bank of East Asia announced its 2H24 performance: revenue, pre-provision profit, and net profit attributable to the parent company increased by 0.2%, 0.9%, and 85.7% year-on-year, respectively, significantly better than the bank's expectations, mainly due to better-than-expected non-interest income and other impairment losses. The bank pointed out that due to the company's non-interest income expected to maintain rapid growth, it raised its profit forecasts for 2025E and 2026E by 11.7% and 6.6% to HKD 3.881 billion and HKD 3.590 billion, respectively. The current stock price corresponds to 0.3 times the 2025E price-to-book ratio and 0.3 times the 2026E price-to-book ratio.

The report noted that net interest income remained basically stable quarter-on-quarter, as the company actively optimized its loan structure. In 2H24, Bank of East Asia's net interest income increased by 0.9% quarter-on-quarter, while the net interest margin decreased by 1 basis point to 2.09%. The net interest margins for mainland China, Hong Kong, and overseas businesses changed by -1 basis point, -10 basis points, and +3 basis points, respectively. By the end of 2H24, the company's total assets, customer loans, and customer deposits changed by +0.3%, -0.5%, and +2.1% quarter-on-quarter, respectively, maintaining a basically stable balance sheet amid insufficient loan demand; the deposit structure improved, with CASA deposits accounting for an increase of 2 percentage points to 31%. The company is continuously optimizing its loan structure, with non-commercial real estate loans growing by 34.9% year-on-year in 2024, mainly concentrated in trade, manufacturing, and strategic industries

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