(HLBK MK/BUY/RM15.50/Target: RM16.90)

HLBK’s 4QFY17 core earnings (factoring in a normalised effective tax rate) were broadly in-line with expectations. Strong NIM expansion and a recovery at Bank of Chengdu contributed positively. 4QFY16 pre-provision operating profit expanded 9.0% yoy. Despite a sharp upward normalisation in provisions, the group managed to sustain a very commendable 10.5% yoy FY17 earnings growth .Maintain BUY and target price of RM16.90 (10.0% ROE, 1.48x FY18 P/B).

Source: UOB Kay Hian Research - 25 Aug 2017