中银香港控股（2388 HK）：买入：尽管香港银行同业拆息较低仍具弹性

Issuer of report:The Hongkong and ShanghaiBanking Corporation LimitedView HSBC Global Research at:https://www.research.hsbc.comHSBC Global Research Podcasts| Listen to our insightsMAINTAIN BUYTARGET PRICE(HKD)PREVIOUS TARGET(HKD)38.1036.10SHARE PRICE(HKD)UPSIDE/DOWNSIDE33.70+13.1%(as of27 May 2025)MARKET DATAMarket cap(HKDm)356,303Free floatMarket cap (USDm)45,469BBG3m ADTV (USDm)70RICFINANCIALS AND RATIOS(HKD)Year to12/2024a12/2025eHSBC EPS3.623.51HSBC EPS (prev)3.623.70Change (%)0.0-5.1Consensus EPS3.553.69PE (x)9.39.6Dividend yield (%)5.95.8P/NAV1.11.0ROE inc. gwill (%)11.610.752-WEEK PRICE(HKD)Source:LSEGIBES, HSBC estimatesGary Lam*, CFAHead of Greater China Financials ResearchThe Hongkong and Shanghai Banking Corporation Limitedgary.lam@hsbc.com.hk+852 2996 6926Joanna Chan*, CFAAnalyst, Asia Financials and FintechThe Hongkong and Shanghai Banking Corporation Limitedjoanna.ct.chan@hsbc.com.hk+852 2288 4826Daffy Ronald*AssociateBangalore* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulationsEquitiesCommercial BanksHong Kong05/2411/24Target price: 38.10High: 33. 70 Low: 21.80 Current: 33.70 ◆◆◆ Find out more Recent decline inHIBOR leadsto short-term earning risks1M HIBOR declined sharply and reached a3-year low at <0.6%in late May2025(vstheJan-Apr average of 3.82%). TheHKDHIBORtoUSDSOFRrate gapalsoreachedanunprecedentedlevelof >370bpin lateMay2025(exhibit2).Meanwhile,theHKMA Hong KongAggregate Balance increased sharply from HKD44.6bn on 6 May to HKD174.1bn on 8 May andhas beenlargely stable since then.Lowering HIBOR would have adirect and material impactonbanks’interest income. On theasset side, themajority of HKDbankloansarebenchmarked againstHIBOR,includingmostcorporate andresidentialmortgageloans.For mortgages,the falling HIBORwould trigger a re-benchmarking to HIBOR plus c130bp as the effective borrowing ratehas fallen below atypicalPrimecap rateof HKD Prime minus c175bp.On theliability & shareholders’fundsside,banks’HKDfunding costsare unlikely to fall asfastand asmuch as HIBORand loan yield. Time deposit rates typically reprice gradually over a 3-to-6 month period.CASArateshave very limited room to reducefurther.Shareholders’fundsare considered as free funds. The lowering HIBOR environmentwouldthereforehave anegativeimpactonbanks’NIM for their HKD assets.As at end-2024, BOCHK had 45.6% of itsassets in HKD, 28.3% in USD,and 26.0% in othercurrenciesincludingRMB.Exhibit1: HIBOR has declined sharply after the large increaseintheAggregateBalanceSource:BloombergExhibit2:Theinterest rate gap betweenHIBORandSOFRis unprecedently highSource:Bloomberg, HSBC050100150200250300350400450500Jan-18Jul-18Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Jul-24Aggregate Balance (HKDbn, LHS)1M HIBOR (%, RHS)-4-20246Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Jul-241-month HKD-USD interest rate differentials (%)1M HIBOR (%)1M CME Term SOFR 30123456Jan-250.604.36Jan-25 Sensitivity: every 100bpHIBORfor c10% earnings over one yearWeperformascenario analysis toassesstheimpactof lower HKD rates on Hong Kong banks’NIMand earnings.Our analysis assumes a simultaneous decrease of 100bp in allHKDasset yields andin the costs of liabilitiesexcluding CASA. We also take into accountthat HKD assetsaccounted for45.6% of BOCHK’s total, or 31.2% of BEA’s, in 2024The results show that a 100bp reduction inHKD interest rates could reduce BOCHK’s NIM by 12.6bp and earningsby 10%(exhibit 3).Theexact extent of impact tothebank’s earningsis also a function of theextentand duration ofHIBOR’sdecline.Wegauge thepotentialimpactson BOCHK’s earnings underdifferentHIBORlevels and different duration of suppressed rates as in the below(exhibit4):Exhibit4: BOCHK earnings sensitivity upon HIBOR decline______________________Duration for the decline to sustain______________________Decline in HIBOR vs 1Q25a1month3month6month12month50bp0.4%1.3%2.5%5.0%100bp0.8%2.5%5.0%10.0%150bp1.3%3.8%7.5%15.0%200bp1.7%5.0%10.0%20.0%250bp2.1%6.3%12.5%25.0%300bp2.5%7.5%15.0%30.0%350bp2.9%8.8%17.5%35.0%400bp3.3%10.0%20.0%40.0%Source:HSBC estimatesNote:1Q25a 1M HIBOR averaged to 3.89%.HSBCratesstrategistDuncan Tanbelieves thewideinterest rate gap between HIBOR andSOFRshouldbe temporary, ascarry tradesunder the currency peg regimewould narrow thegap over time(HKD rates–Why volatility should be temporary, 13 May 2025). Indeed, USDHKDhas rebounded toabove7.83amid increased carry trade flows.Some banks withabundantliquidity havealsorushed to buy Exchange Fund Bills and Notes(EFBN)to earn interest; the91DEFBN issuance on14Maywas oversubscribed by2.5x.Therehasalsobeenseasonalliquidity demand for corporate dividend payments and large IPOs in the second halfofMay.Allofthese couldsupport upward HIBOR normalisation.Our rate strategistforecasts for 3M HIBORtobe3.25%/3.05%/2.85% for 2Q/3Q/4Q25e.That said,the ratesstrategy teamalsoseesdownsiderisks toits3M HIBORforecast,recognisi