(2011.7.21 Published, 41 Pages)
Agenda
1.A modest rather than sharp NPL cycle in 2011E/12E; trading ranges set; be selective
2.Some cyclical NPLs due to sharp corporate debt rise and tightening
3.LGP loans: near-term NPL modest in 2011E/12E; long-term risks hinge on fiscal reform
4.Reduce earnings forecasts on slower balance sheet growth/higher credit costs
5.Two key reasons for our earnings estimate reductions
6.12-month target prices reduced for A/H share banks by an average of 14%/16%
7.New risk weighting: reducing long-term ROE assumptions
8.BoCom (3328.HK, Sell): downgrade on low CAR, high earning risks
9.SPDB (600000.SS, Sell): downgrade on interbank exposure and LGP
10.CNCB (0998.HK, Buy): off CL due to higher earning sensitivity