Citi has released a research report stating that BANK OF E ASIA (00023) is expected to outperform market expectations in its fundamental operational performance going forward. The bank's valuation is also considered attractive. Its recent inclusion in the Hang Seng Composite Index suggests potential future eligibility for the Southbound Stock Connect program. Consequently, Citi has upgraded its investment rating on the stock from "Neutral" to "Buy" and increased the target price from HK$14.9 to HK$16.

During its earnings briefing, BANK OF E ASIA announced new strategic targets, aiming to raise its return on equity (ROE) to 7% by 2028, compared to 3.1% in 2025. The market consensus for 2028 ROE is 5.1%. Key drivers for this improvement are projected to include net interest income remaining stable, non-interest income growing at an annual rate of 14% between fiscal years 2025 and 2028, annual cost growth staying below 5%, and credit costs potentially falling below 60 basis points by fiscal year 2028.

Citi noted that BANK OF E ASIA's dividend target for 2028 is double the 2025 level, implying dividends per share could reach approximately HK$1.2 by 2028. The firm forecasts an ROE of 6% by that time, which, while lower than management's target, remains significantly higher than the market's general expectation of 5.1%.