Well exposed to a sharply rising rate trend
? FY21 net profit rose 13.9% yoy, the strongest since FY11, with FY21 ROE rising 67bp yoy to 11.28%, its first rise since FY10.
? 4Q21 NIM was up 3bp qoq, and we believe it is well placed to deliver a better-than-peer increase in NIM in FY22F and FY23F.
? We like BOC for its exposure to US rate rises (we expect more than 200bp in 2022F) via its HK operations (which comprise about 17% of loans in FY21).
? BOC is our top pick among the big banks. Reiterate Add rating, FY22FFY24F EPS raised by 3-4% on lower credit costs. TP raised 5% to HK$4.2.