{"id":324701,"date":"2023-08-31T15:17:34","date_gmt":"2023-08-31T07:17:34","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324701"},"modified":"2023-08-31T15:17:36","modified_gmt":"2023-08-31T07:17:36","slug":"stock-in-focus-east-west-banking-corp-ew-31-aug-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-east-west-banking-corp-ew-31-aug-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: East West Banking Corp. (EW) – 31 Aug 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>EW<\/td><\/tr>
Company Name<\/strong><\/td>East West Banking Corp.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>31 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 8.60<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Retain BUY. Our target price (TP) for EW at Php8.60 provides a decent upside of 23.7%, including our 2023 dividend yield forecast of 5.6%. We also note that EW is the cheapest bank among our coverage with a Price-to-Book Ratio (PBR) of 0.2x.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Continued recovery<\/strong><\/p>\n\n\n\n

We expect East West Banking Corp. (EW) to keep pace for the rest of the year, since its fees and commissions and loans have recovered, growing by double digits year-on-year (y\/y). Recall that EW\u2019s 1st half (1H) 2022 net income tumbled 60% to Php1.5 billion primarily due to the 1% slide in consumer loans (74% of total loans) and the 15% drop in fees and income. Furthermore, we see EW\u2019s net interest margins (NIMs) continuing to expand on more loan re-pricing.<\/p>\n\n\n\n

1H 2023 Recap<\/strong><\/p>\n\n\n\n

EW doubled its 1H 2023 net income to Php3.3 billion. Net interest income climbed 18% to Php13.0 billion as net interest margin expanded by 77bps to 7.5%, while consumer loans (77% of total loans) grew by 27%. Fees and commissions surged 70% to Php2.3 billion due to improved banking transactions and improved securities and FX trading. Operating expense grew by 16% to Php9.5 billion driven by manpower, IT and business-related expenses. CAR and CET1 were at 14.0% and 13.2%, respectively.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>