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CTG [BUY +27.9%] - Proactive provisioning to improve return metrics - Update

Company Research

04 Jun 2018

We reiterate our BUY rating for CTG, offering a total return of 27.9%. Q1 2018 NIM slightly increased to 2.72% (+7 bps Y-o-Y) due to its retail portion increasing to 25% of gross loan book (+2 ppts Y-o-Y). We forecast its interest-earning asset yields will rise by 20 bps to 6.9% in 2018 with its retail portion continuing to increase to 27%. However, our forecast NIM is 2.85% as strong term deposit growth will lead to higher funding costs (+ 12 bps Y-o-Y).
Tags: CTG

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