{"id":328025,"date":"2024-05-24T01:28:10","date_gmt":"2024-05-23T17:28:10","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328025"},"modified":"2024-05-24T01:28:13","modified_gmt":"2024-05-23T17:28:13","slug":"stock-in-focus-east-west-banking-corp-ew-24-may-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-east-west-banking-corp-ew-24-may-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: East West Banking Corp. (EW) – 24 May 2024 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>24 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 14.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Overall, EW\u2019s good start to 2024 and its strategic initiatives position it favorably within the competitive Philippine banking sector. With a focus on consumer lending, digital transformation, and shareholder value creation, EW is well-positioned for sustained growth and profitability. BUY rating retained.<\/p>\n\n\n\n

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

East West Banking Corporation (EW)\u2019s Net Income (NI) surged by +8% year-on-year (y\/y) to P1.7 billion, primarily driven by the bank’s strategic focus on expanding consumer lending and enhancing digital initiatives, which caused the improvement in its financial performance and market position.<\/p>\n\n\n\n

EW’s net revenues for 1Q 2024 stood at P10.0 billion, a substantial +28% y\/y increase, which can be attributed to a +34% y\/y rise in Net Interest Income (NII), amounting to P8.2 billion. The bank’s strategic emphasis on consumer lending, particularly in auto loans (P2.4bn), credit cards (P991.6mn), and personal loans (P237.7mn), has been pivotal, contributing to 81% of its total loans and an impressive NIM of 8.1% (+70bps y\/y; +50bps q\/q). <\/p>\n\n\n\n

Additionally, non-interest income saw a +9% y\/y uptick to P1.8bn, driven by increased banking transactions. Operationally, EW’s expenses rose by +22% y\/y to P5.8bn as it beefed up its investments in technology, manpower expansion, and higher transaction-related taxes. Despite these increased expenses, the bank maintained a cost- to-income ratio of 58%, demonstrating efficient operational management within industry standards.<\/p>\n\n\n\n

The bank’s total assets grew by +19% y\/y to P480.4bn, with total loans and receivables also increasing by +19% y\/y to P306.1bn, supported by a +12% y\/y rise in total deposits, reaching P356.6bn during the quarter. Capital ratios remain strong, with a CAR of 13.5% and a CET1ratio of 12.7%, both well above regulatory requirements.<\/p>\n\n\n\n

Reflecting its commitment to shareholder value, EW declared cash dividends of P0.54\/sh, totaling around P1.2bn, which is 20% of the previous year\u2019s NI\u2014 marking its 3rd consecutive year of dividend declarations, underscoring its consistent performance and shareholder returns.<\/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>