Strong Personal Loan Growth and Competitive Valuation Make Bank of Communications Co a Buy

In a report released today, Manyi Lu from DBS reiterated a Buy rating on Bank of Communications Co (BKFCF – Research Report), with a price target of HK$8.00.

Manyi Lu’s rating is based on several compelling factors that make Bank of Communications Co an attractive investment. The bank has demonstrated strong personal loan growth, outpacing the market and increasing its personal loan balance significantly. This strategic focus on personal loans, which typically have higher yields and lower funding costs, positions the bank favorably in the current financial landscape.
Additionally, despite the anticipated share dilution following the Ministry of Finance’s capital injection, the bank remains a solid dividend play with an expected yield near 5%. This yield is particularly appealing to long-term investors, such as insurance companies in China. Furthermore, the bank’s valuation remains competitive compared to its peers, and its performance has been robust in recent quarters, reinforcing the Buy recommendation.